THE 


CHARACTER  AND  LOGICAL  METHOD 


OF 


•POLITICAL  ECONOMY. 


BY  J.  E.  CAIENES,  LL.D., 

EMEBITC8   PBOFESSOB  OF  POLITICAL   ECONOMY  IN  TTNIYEBSITY  COLLEGE,  LONDCX, 

AUTHOE  OF   "SOME  LEAPING  PBINOIPLE8  OF  POLITICAL 

ECONOMY,  NEWLY   EXPOUNDED." 


I    Library 


NEW  YORK: 
HARPER   &   BROTHERS,    PUBLISHERS, 

FRANKLIN      SQUARE. 
1875. 


-f?  .tttlta' 

' 


' 


/*; 


PREFACE  TO  SECOND  EDITION. 

IN  offering  to  the  public  a  new  edition  of  some  lect 
ures  delivered  in  Dublin  more  than  seventeen  years 
ago,  a  few  words  of  explanation  are  needed.  As  re 
gards  the  substance  of  the  opinions  advanced  —  the 
view  taken  of  Political  Economy,  and  of  its  methods 
of  proof  and  development — the  present  work  does  not 
differ  from  its  predecessor;  but  extensive  changes  have 
been  made  in  the  form  and  treatment.  Numerous 
passages  have  been  recast;  increased  prominence  has 
been  given  to  aspects  of  the  case  only  touched  on  in 
the  former  volume ;  and  some  entirely  new  topics  have 
been  introduced.  To  one  of  these — "Definition" — an 
additional  lecture  has  been  devoted.  I  would  fain  hope 
that  in  its  new  shape  the  work  will  be  found  somewhat 
less  unworthy  than  in  its  earlier  form  of  such  favor  as 
it  has  met  with.  Xo  one,  however,  can  be  more  con 
scious  than  the  author  how  very  far  it  still  falls  short 
of  what  such  a  work  ought  to  be. 

In  connection  with  logical  method,  a  good  deal  of 
discussion  has  of  late  taken  place  on  a  question  that 
had  been  but  little  heard  of  when  the  book  first  ap- 


iv  PREFACE   TO   SECOND  EDIT! OX. 

peared — I  mean  the  employment  of  Mathematics  in  the 
development  of  economic  doctrine.  The  position  then 
taken  with  reference  to  this  point  was  that,  having  re 
gard  to  the  sources  from  which  Political  Economy  de 
rives  its  premises,  the  science  does  not  admit  of  mathe 
matical  treatment.  Since  that  time,  my  friend  Profess 
or  Jevons  has  published  an  able  work  ("The  Theory 
of  Political  Economy"),  in  which  the  opposite  opin 
ion  is  maintained  ;  and  some  few  others,  both  here  and 
on  the  Continent  of  Europe,  have  followed  in  his  track. 
Having  weighed  Professor  Jevons's  argument  to  the 
best  of  my  ability,  and  so  far  as  this  was  possible  for 
one  unversed  in  Mathematics,  I  still  adhere  to  my  orig 
inal  view.  So  far  as  I  can  see,  economic  truths  are  not 
discoverable  through  the  instrumentality  of  Mathemat 
ics.  If  this  view  be  unsound,  there  is  at  hand  an  easy 
means  of  refutation — the  production  of  an  economic 
truth,  not  before  known,  which  has  been  thus  arrived 
at ;  but  I  am  not  aware  that  up  to  the  present  any 
such  evidence  has  been  furnished  of  the  efficacy  of  the 
mathematical  method.  In  taking  this  ground,  I  have 
no  desire  to  deny  that  it  may  be  possible  to  employ 
geometrical  diagrams  or  mathematical  formnlse  for 
the  purpose  of  exhibiting  economic  doctrines  reached 
by  other  paths  ;  and  it  may  be  that  there  are  minds 
for  which  this  mode  of  presenting  the  subject  has  ad 
vantages.  What  I  venture  to  deny  is  the  doctrine 


PREFACE   TO   SECOND  EDITION.  v 

which  Professor  Jevons  and  others  have  advanced — 
that  economic  knowledge  can  be  extended  by  such 
means ;  that  Mathematics  can  be  applied  to  the  devel 
opment  of  economic  truth,  as  it  has  been  applied  to  the 
development  of  mechanical  and  physical  truth  ;  and, 
unless  it  can  be  shown  either  that  mental  feelings  ad 
mit  of  being  expressed  in  precise  quantitative  forms, 
or,  on  the  other  hand,  that  economic  phenomena  do  not 
depend  upon  mental  feelings,  I  am  unable  to  see  how 
this  conclusion  can  be  avoided.  "  The  laws  of  Politic 
al  Economy,"  says  Mr.  Jevons,  "  must  be  mathematical 
for  the  most  part,  because  they  deal  with  quantities  and 
the  relations  of  quantities."  If  I  do  not  mistake,  some 
thing  more  than  this  is  needed  to  sustain  Mr.  Jevons's 
position. 

I  have  retained  most  of  the  discussions  in  the  original 
notes,  although  some  of  the  questions  discussed  have  lost 
much  of  the  practical  interest  they  once  had  ;  what  was 
formerly  speculation  having  in  some  instances  become 
realized  fact.  They  will  not  on  this  account,  however, 
serve  less  well  the  purpose  of  their  first  introduction— 
that  of  illustrating  the  principles  of  economic  method. 

It  falls  to  me  once  again  to  have  to  express  my  deep 
obligations  to  my  friend  Professor  Nesbitt,  who,  with  his 
usual  kindness  in  correcting  the  proofs,  has  not  a  little 
lightened  my  present  labors.  j 

KIDBROOK  PARK  ROAD,  S.E.,  Feb.,  1875. 


PREFACE  TO  FIRST  EDITION. 

ONE  of  the  conditions  attached  to  the  Whately  Pro 
fessorship  of  Political  Economy  requires  that  at  least 
one  lecture  in  the  year  shall  be  published  by  the  Pro 
fessor.  In  the  following  pages  I  have  ventured  consid 
erably  to  exceed  this  requirement,  the  subject  which  I 
selected  as  most  appropriate  for  my  opening  course  not 
being  such  as  could  be  conveniently  compressed  within 
a  single  lecture. 

O 

With  respect  to  the  views  advanced  in  this  work,  it 
may  be  well,  in  order  to  prevent  misapprehension,  to 
disclaim  at  the  outset  all  pretense  to  the  enunciation  of 
any  new  method  of  conducting  economic  inquiries.  My 
aim,  on  the  contrary,  has  been  to  bring  back  the  discus 
sions  of  Political  Economy  to  those  tests  and  standards 
which  were  formerly  considered  the  ultimate  criteria  of 
economic  doctrine,  but  which  have  been  completely  lost 
sight  of  in  many  modern  publications.  With  a  view  to 
this,  I  have  endeavored  to  ascertain  and  clearly  to  state 
the  character  of  Political  Economy,  as  this  science  ap 
pears  to  have  been  conceived  by  that  succession  of 
writers  of  which  Smith,  Mai  thus,  Eicardo,  and  Mill  are 


viii  PREFACE   TO   FIRST  EDITION. 

the  most  distinguished  names ;  and  from  the  character 
thus  ascertained  to  deduce  the  logical  method  appropri 
ate  thereto ;  while  I  have  sought  further  to  fortify  the 
conclusions  to  which  I  have  been  led  by  the  analogy 
of  the  method  which  in  the  physical  sciences  has  been 
fruitful  of  such  remarkable  results. 

It  may,  perhaps,  be  thought  that  it  would  have  con 
duced  more  to  the  advantage  of  economic  science  if, 
instead  of  pausing  to  investigate  the  logical  principles 
involved  in  its  doctrines,  I  had  turned  those  principles 
to  practical  account  by  directing  investigation  into  new 
regions.  To  this  I  can  only  reply  that  the  contrarieties 
of  opinion  at  present  prevailing  among  writers  on  Po 
litical  Economy  are  so  numerous  and  so  fundamental, 
that,  as  it  seems  to  me,  no  other  escape  is  open  to  econo 
mists,  from  the  confusion  and  the  contradictions  in 
which  the  science  is  involved,  than  by  a  recurrence  to 
those  primary  considerations  by  which  the  importance 
of  doctrines  and  the  value  of  evidence  are  to  be  deter 
mined.  To  disregard  this  conflict  of  opinion,  and  to 
proceed  to  develop  principles  the  foundations  of  wThich 
are  constantly  impugned,  would  be  to  prosecute  inquiry 
to  little  purpose. 

The  discussion  of  economic  method  with  a  view  to 
this  object  has  rendered  it  necessary  for  me  to  refer 
principally  to  those  questions  on  which  opinion  is  at 
present  divided ;  and  in  doing  so  I  have  been  led  fre-' 


PREFACE   TO  FIRST  EDITION.  IX 

quently  to  quote  from  recent  writers  for  the  purpose 
simply  of  dissenting  from  their  doctrines.  This  course, 
which  I  woulcLgladly  have  avoided  had  it  been  com 
patible  with  the  end  in  view,  has  given  to  portions  of 
these  lectures  more  of  a  controversial  character  than  is, 
perhaps,  desirable. 

I  feel  also  that  some  apology  is  due  for  the  number 
and  the  length  of  the  notes.  As  I  have  just  stated,  the 
nature  of  the  subject  required  frequent  reference  to 
disputed  topics.  To  have  met  the  current  objections 
to  the  principles  which  I  assumed  by  stopping  on  eacli 
occasion  to  discuss  them  in  the  text,  would  have  incon 
veniently  broken  the  sequence  of  ideas,  and  hopelessly 
weakened  the  force  of  the  general  argument.  On  the 
other  hand,  to  have  wholly  passed  them  by  without  no 
tice  would,  perhaps,  have  been  still  more  unsatisfactory 
to  those  who  were  disposed  to  adopt  such  objections.  I 
should  thus  have  been  guilty  of  the  imprudence  of  a 
commander  who  invades  a  country  leaving  numerous 
untaken  fortresses  in  his  rear.  Under  these  circumstan 
ces  I  have  had  recourse  to  the  only  other  alternative — 
that  of  transferring  such  discussions  to  the  notes,  or, 
where  the  argument  is  too  long  for  a  note,  to  an  ap 
pendix. 

*•  #  -*  •*  •*  -x- 

J.  E.  CAIKXES. 
A  2 


CONTENTS. 


LECTURE  I. 

I  X  T  R  O  D  U  C  T  O  E  Y. 

PAGE 

§  1.  Unsettled  condition  of  Political  Economy  as  to  its  main  doc 
trines 19 

Traceable  chiefly  to  the  influence  exerted  by  the  practical 
successes  of  the  science  on  its  method 22 

§*2.  Political  Economy — "  the  Science  of  Wealth  " 25 

Reasons  for  this  limitation  of  the  inquiry 28 

M.  Say's  views  considered 30 

§  3.  Significance  of  the  term  "science"  in  the  definition  of  Political 

Economy 33 

Meaning  of  the  expression   "  laws    of  the  phenomena   of 

wealth  " 35 

Neutral  attitude  of  Political  Economy  in  presence  of  com 
peting  systems  of  social  or  industrial  life 36 

Indefinitely  progressive  nature  of  economic  investigation 39 

Practical  evils  which  have  resulted  from  ignoring  the  scien 
tific  character  of  this  studv. . .  41 


LECTURE  II. 

OF    THE    MENTAL    AND    PHYSICAL    PKEMISES     OF    POLITICAL 

ECONOMY,   AXD    OF   THE    LOGICAL   CHARACTER    OF 

THE    DOCTRINES   THENCE    DEDUCED. 

§  1 .  Position  occupied  by  economic  speculation  in  relation  to  the  two 

great  departments  of  existence — matter  and  mind 43 

Views  on  this  point  of  Mr.  Mill  and  of  Mr.  Senior 44 


xii  CONTENTS. 

Criticism  of  these  views 47 

Political  Economy  neither  a  purely  mental  nor  a  purely  phys 
ical  inquiry,  but  referable  to  a  class  of  studios  intermediate 

between  mental  and  physical  inquiries 52 

Proper  limits  of  economic  inquiry 53 

§  2.  Mental  and  physical  premises  of  Political  Economy 54 

Secondary  influences 57 

How  far  should  moral  and  religious  considerations  be  taken 

account  of  in  economic  investigation 59 

§  3.  Discussion  of  the  question  whether  Political  Economy  is   a 

"  positive  "  or  a  "  hypothetical "  science 00 

Mr.  Senior's  view  criticised G5 


LECTURE  III. 

OF   THE    LOGICAL   METHOD    OF   POLITICAL   ECONOMY. 

§  1.  Common  notion  that  economic  investigation  should  be  con 
ducted  according  to  the  "  inductive  method  " 72 

Latitude  of  meaning  with  which  the  expression  "inductive 
method  "  has  been  employed  by  authoritative  writers 74 

Examination  of  the  doctrine  that  "  induction,"  in  the  strict 
sense  of  the  term,  is  the  true  path  of  economic  inquiry. ...  70 

§  2.  Logical  position  of  the  speculator  on  the  physical  universe  at 

the  outset  of  physical  inquiry 81 

The  method  of  induction  (as  distinguished  from  deduction) 
imperative  at  this  stage 84 

Reason  of  this 85 

§  3.  This  reason  does  not  hold  in  economic  investigation,  because 
the  ultimate  principles  of  Political  Economy,  being  the 
conclusions  and  proximate  phenomena  of  other  branches 
of  knowledge,  admit  of  direct  proof. 87 

§  4.  The  economist  excluded  from  the  use  of  experiment,  but  has  at 

his  disposal  an  inferior  substitute 89 

Place  of  hypothesis  in  economic  reasoning 00 

Use  of  this  expedient  by  Bicardo 03 

Place  of  hypothesis  in  physical  investigation 04 

§  5.  Place  of  statistics  in  economic  reasoning 97 


CONTENTS.  xiil 

PAGE 

Iii  no  respect  different  from  that  in  which  they  stand  to  other 
sciences  which,  like  Political  Economy,  have  reached  the 
deductive  stage 97 

LECTURE  IV. 

OF   THE    LOGICAL   METHOD    OF   POLITICAL   ECONOMY. 

(Continued.*) 

§  1 .  The  method  of  Political  Economy  inculcated  in  the  preceding 
lecture  the  same  which  has,  in  fact,  been  followed  by  the 

leading  authorities  in  the  science 100 

Mr.  Tooke's  method  in  monetary  investigation 101 

§  2.  Analysis  of  the  doctrine  that  "  cost  of  production  regulates  the 

value  of  freely  produced  commodities  " 

Nature  of  the  evidence  by  which  an  economic  law  is  estab 
lished  or  refuted 110 

§  3.  Illustrations— from  the  ' '  Wealth  of  Nations  " Ill 

"  from  Ricardo's  works 115 


LECTURE  V. 

OF    THE     SOLUTION     OF     AN     ECONOMIC     PROBLEM,   AND     OF 

THE     DEGREE     OF    PERFECTION    OF    WHICH 

IT    IS    SUSCEPTIBLE. 

§  1.  Circumstances  in  which  an  economic  law,  regarded  logically, 
differs  from  a  law  in  the  more  advanced  physical  sciences 

— unsusceptibility  of  precise  quantitative  statement 118 

[Note. — Mr.  Macleod's  and  Mr.  Jennings's  view] 120 

Unprecise  character  of  economic  laws  illustrated  by  the  the 
ory  of  the  decline  of  profits 1 22 

And  by  the  variations  in  the  price  of  food 125 

And  by  the  effects  of  changes  of  taxation  on  consumption 127 

§  2.  Consequence  of  the  unprecise  character  of  economic  laws  as  af 
fecting  the  solution  of  economic  problems 129 

Illustrations— drain  of  silver  to  the  East  in  1856 132 

high  price  of  corn  during  the  four  years  1853 
to  1856  inclusive...  .   133 


Xiv  CONTENTS. 

TAGr. 

§  3.  Prevalent  ignorance  as  to  what  the  solution  of  an  economic 

problem  means 1 34 

Illustrations  [vide  also  notes] 135 


LECTURE  VI. 

OF    THE     PLACE     AND    PURPOSE     OF    DEFINITION    IX    POLIT 
ICAL   ECONOMY. 

§  1 .  Definition  in  positive  science  embraces  two  operations — classifi 
cation  and  naming 143 

Preliminary  difficulty 1 43 

How  to  be  dealt  with 144 

§  2.  Danger  of  too  great  rigidity  in  nomenclature — Sir  John  Her- 

schel 144 

Paucity  of  definitions  in  the  writings  of  the  early  investi 
gators  in  Political  Economy  the  result  of  a  sound  dis 
cretion 145 

In  the  present  state  of  science  definitions  are  needed 145 

§  3.  The  objection  to  a  definition  that  it  is  founded  on  an  attribute 

admitting  of  degrees  not  valid 147 

§•4.  Mr.  Mill's  aphorism  respecting  the  rule  which  should  guide  us 

in  choosing  a  nomenclature ]49 

Nomenclature  in  Political  Economy  ought  to  be  significant. ..  150 
Nomenclature  in  chemistry  at  once  significant  and  technical.  15! 
How  far  similar  excellence  in  its  nomenclature  is  attainable 

by  Political  Economy 1 53 

Twofold  remedy  for  unavoidable  defects 154 

§  5.  General  results  of  the  discussion 1 55 


LECTURE  VII. 

OF   THE    MALTIIUSIAN   DOCTRINE    OF    POPULATION. 

§  1.  Statement  of  the  Malthusian  doctrine ]  57 

Logical  process  by  which  Malthus  established  it 159 

[Note. — Objection  that  the  doctrine,  though  true  in  the  ab 
stract,  is  without  practical  importance,  considered] 1GO 


COXTEXTS.  XV 

PAGE 

§  2.  Important  consequences,  theoretical  and  practical,  flowing  from 

the  doctrine 1 64 

[Xote. — Misrepresentations  of  Malthus] 107 

§  3.  Mr.  Eickards's  argument  against  the  position  of  Malthus  con 
sidered 170 

The  objection  taken  is  not  inconsistent  with  the  truth  of  the 
Malthusian  view 1 7'2 

On  the  other  hand,  the  conclusions  contended  for  by  Mr. 
Eickards  might  have  been  accepted  by  Malthus 1 73 

The  issue  for  consideration,  therefore,  is  not  as  to  the  truth, 
but  as  to  the  pertinency,  with  reference  to  economic  ends, 
of  the  positions  respectively  of  Malthus  and  of  his  critic 1 74 

Mr.  Eickards's  doctrine  "  as  to  the  natural  ascendency  of  the 
force  of  production  over  the  force  of  population  "  ex 
amined  182 

§  4.  Further  proof  of  the  irrelevancy  of  Mr.  Eickards's  argument 
furnished  by  his  practical  maxims,  which  are  in  effect 

Malthusian 183 

Charge  against  Malthus  that  his  doctrine  implies  a  "miscal 
culation  of  means  to  ends  in  the  arrangements  of  the 
universe  " 18G 


LECTURE  VIII. 

OF   THE    THEORY    OF   RENT. 

§  1.  The  purpose  of  a  theory  of  rent  is  to  explain  the  fact  of  rent. . .  183 

"  Economic  rent  "  defined 190 

Theory  of  the  Physiocrats 191 

In  what  respect  it  failed  to  solve  the  problem 192 

Adam  Smith's  contribution  to  the  doctrine  as  left  by  the 

Physiocrats 192 

In  what  respect  the  doctrine,  as  thus  enlarged,  still  failed  to 

solve  the  problem 193 

The  true  solution  first  suggested  by  Dr.  Anderson,  and  first 

fully  expounded  by  Eicardo 1 93 

§  2.  Statement  and  proof  of  Eicardo's  theory  of  rent 19."> 

§  3.  Phenomena  of  rent  which  are  not  covered  by  Eicardo's  the 
ory...  201 


Xvi  CONTENTS. 

TAGS 

Such  instances  are  of  the  nature  of  "  residual  phenomena  ". .  202 
The  cause  of  rent  in  all  such  cases  is  monopoly 205 

§  4.  Is  it  possible  to  embrace  all  the  facts  of  rent  under  a  single 

principle — say  the  principle  of  monopoly  ? — discussed 206 

The  incidents  of  rent,  in  relation  to  price,  taxation,  and  other 
influences,  vary  according  to  the  source  from  which  it 
arises 207 

§  5.  Mr.  Rickards's  argument  against  "  the  diminishing  productive 
ness  of  the  land" 212 

The  issue  raised  is  not  as  to  the  truth  of  the  doctrine,  but  as 
to  its  pertinency  with  reference  to  the  ends  of  economic  in 
vestigation 214 

Mr.  Eickards's  criticism  in  effect  impugns  the  whole  received 
system  of  inductive  philosophy 217 

And  is  tantamount  to  abandoning  the  scientific  pretensions 
of  Political  Economy 218 


APPENDICES. 

Appendix  A 223 

Appendix  B 229 

Appendix  C 234 


THE 

CHARACTER  AND  LOGICAL  METHOD 


OP 


POLITICAL  ECONOMY. 


?  ' 

Library 


THE  CHARACTER  AND  LOGICAL  METHOD 

OP 

POLITICAL  ECONOMY. 


LECTURE  I. 

INTRODUCTORY. 

§  1.  Ix  commencing  a  course  of  lectures  on  Political 
Economy,  it  is  usual  and  natural  to  indulge  in  some  con 
gratulatory  remarks  on  the  progress  of  tlie  science  in  re 
cent  times,  and  more  particularly  on  tlie  satisfactory  re 
sults  which  have  attended  the  extensive,  though  as  yet 
but  partial,  recognition  of  its  principles  in  the  commer 
cial  and  financial  codes  of  the  country.  It  is,  indeed,  not 
easy  to  exaggerate  the  importance  of  these  latter  achieve 
ments,  and  it  is  certainly  true  that  economic  doctrines 
have  in  recent  years  received  some  useful  developments 
and  corrections  ;  at  the  same  time  I  think  it  must  be  ad 
mitted  that,  on  the  whole,  the  present  condition  and 
prospects  of  the  science  are  not  such  as  a  political  econ 
omist  can  contemplate  with  unmixed  satisfaction. 

It  is  now  a  quarter  of  a  century  since  Colonel  Torrens 
wrote  as  follows  :  "  In  the  progress  of  the  human  mind, 
a  period  of  controversy  among  the  cultivators  of  any 
branch  of  science  must  necessarily  precede  the  period 


20  LOGIC  OF  POLITICAL  ECONOMY. 

of  unanimity.  With  respect  to  Political  Economy,  the 
period  of  controversy  is  passing  away,  and  that  of  una 
nimity  rapidly  approaching.  Twenty  years  hence  there 
will  scarcely  exist  a  doubt  respecting  any  of  its  funda 
mental  principles."1  Five-and-thirty  years  have  now 
passed  since  this  unlucky  prophecy  was  uttered,  and  yet 
such  questions  as  those  respecting  the  laws  of  popula 
tion,  of  rent,  of  foreign  trade,  the  effects  of  different 
kinds  of  expenditure  upon  distribution,  the  theory  of 
prices — all  fundamental  in  the  science— are  still  unset 
tled,  and  must  still  be  considered  as  "  open  questions," 
if  that  expression  may  be  applied  to  propositions  which 
are  still  vehemently  debated,  not  merely  by  sciolists  and 
smatterers,  who  may  always  be  expected  to  wrangle, 
but  by  the  professed  cultivators  and  recognized  ex 
pounders  of  the  science.2  So  far  from  the  period  of 
controversy  having  passed,  it  seems  hardly  yet  to  have 
begun  —  controversy,  I  mean,  not  merely  respecting 
propositions  of  secondary  importance,  or  the  practical 
application  of  scientific  doctrines  (for  such  controversy 
is  only  an  evidence  of  the  vitality  of  a  science,  and  is  a 
necessary  condition  of  its  progress),  but  controversy  re 
specting  fundamental  principles  which  lie  at  the  root  of 
its  reasonings,  and  which  were  regarded  as  settled  when 
Colonel  Torrens  wrote. 

This  state  of  instability  and  uncertainty  as  to  funda 
mental  propositions  is  certainly  not  favorable  to  the  suc 
cessful  cultivation  of  Political  Economy — it  is  not  pos 
sible  to  raise  a  solid  or  durable  edifice  upon  shifting 
quicksands  ;  besides,  the  danger  is  ever  imminent  of  re- 

1  "  Essay  on  the  Production  of  Wealth,"  Introduction,  p.xiii.     1821. 

2  Vide.  Appendix  A. 


INTRODUCTORY.  21 

viving  that  skepticism  respecting  all  economic  specula 
tion  which  at  one  time  so  much  impeded  its  progress. 
It  would,  indeed,  be  vain  to  expect  that  Political  Econo 
my  should  be  as  rapidly  and  steadily  progressive  as  the 
mathematical  and  physical  sciences.  Its  close  affinity 
to  the  moral  sciences,  as  has  been  often  pointed  out, 
brings  it  constantly  into  collision  with  moral  feelings 
and  prepossessions  which  can  scarcely  fail  to  make  them 
selves  felt  in  the  discussion  of  its  principles ;  while  its 
conclusions,  intimately  connected  as  they  are  with  the 
art  of  government,  have  a  direct  and  visible  bearing 
upon  human  conduct  in  some  of  the  most  exciting  pur 
suits  of  life.  Add  to  this  that  the  technical  terms  of 
Political  Economy  are  all  taken  from  popular  language, 
and  inevitably  partake,  in  a  greater  or  less  degree,  of 
the  looseness  of  colloquial  usage.  It  is  not,  therefore, 
to  be  expected  that  economic  discussions  should  be  car 
ried  on  with  the  same  singleness  of  purpose,  or  severity 
of  expression  and  argumentation  —  consequently  with 
the  same  success  —  as  if  they  treated  of  the  ideas  of 
number  and  extension,  or  of  the  properties  of  the  ma 
terial  universe. 

Such  considerations  will,  no  doubt,  account  for  much 
of  the  instability  and  vicissitude  which  have  marked  the 
progress  of  economic  inquiry;  but  I  do  not  think  they 
are  sufficient  to  explain  the  present  vacillating  and  un 
satisfactory  condition  of  the  science  in  respect  to  funda 
mental  principles.  To  understand  this,  I  think  wre  must 
advert  to  circumstances  of  a  more  special  character,  and 
more  particularly  to  the  effect  which  the  practical  suc 
cesses  achieved  by  Political  Economy  (as  exemplified  in 
the  rapid  and  progressive  extension  of  the  commerce  of 


22  LOGIC    OF  POLITICAL   ECONOMY. 

the  country  since  the  adoption  of  free  trade)  have  had 
on  the  method  of  treating  economic  questions. 

When  Political  Economy  had  nothing  to  recommend 
it  to  public  notice  but  its  own  proper  and  intrinsic  evi 
dence,  no  man  professed  himself  a  political  economist 
who  had  not  conscientiously  studied  and  mastered  its  ele 
mentary  principles;  and  no  one  who  acknowledged  him 
self  a  political  economist  discussed  an  economic  problem 
without  constant  reference  to  the  recognized  axioms  of 
the  science.  But  when  the  immense  success  of  free  trade 
gave  experimental  proof  of  the  justice  of  those  principles 
on  which  economists  relied,  an  observable  change  took 
place  both  in  the  mode  of  conducting  economic  discus- 

•*•  O 

sions,  and  in  the  class  of  persons  who  attached  themselves 
to  the  cause  of  Political  Economy.  Many  now  enrolled 
themselves  as  political  economists  who  had  never  taken 
the  trouble  to  study  the  elementary  principles  of  the  sci 
ence  ;  and  some,  perhaps,  whose  capacities  did  not  en 
able  them  to  appreciate  its  evidence  ;  while  even  those 
who  had  mastered  its  doctrines,  in  their  anxiety  to  pro 
pitiate  a  popular  audience,  were  too  often  led  to  abandon 
the  true  grounds  of  the  science,  in  order  to  find  for  it  in 
the  facts  and  results  of  free  trade  a  more  popular  and 
striking  vindication.1  It  was  as  if  mathematicians,  in 
order  to  attract  new  adherents  to  their  ranks,  had  con 
sented  to  abandon  the  method  of  analysis,  and  to  rest  the 

1  See  an  article  in  the  Edinluryh  Review,  April,  1854,  on  "  The  Con 
sumption  of  Food  in  the  United  Kingdom,"  and  compare  this  with  the 
celebrated  "Merchants'  Petition"  of  1820,  the  production  of  Mr.Tooke. 
With  reference  to  the  former  I  may  quote  the  remark  of  Mr.  Tooke  :  "It 
is  necessary,  even  in  setting  forth  the  successes  of  a  just  policy,  that  no 
violence  should  be  done  to  established  modes  of  reasoning,  or  to  the  facts 
of  the  case  as  thev  reallv  exist." 


INTRODUCTORY.  23 

truth  of  their  formulas  on  the  correspondence  of  the  al 
manacs  with  astronomical  events.  The  severe  and  logical 
style  which  characterized  the  cultivators  of  the  science  in 
the  early  part  of  the  century  has  thus  been  changed  to 
suit  the  different  character  of  the  audience  to  whom 
economists  now  address  themselves.  The  discussions  of 
Political  Economy  have  been  constantly  assuming  more 
of  a  statistical  character;  results  are  now  appealed  to  in 
stead  of  principles;  the  rules  of  arithmetic  are  super 
seding  the  canons  of  inductive  reasoning;1  till  the  true 
course  of  investigation  has  been  well-nigh  forgotten,  and 
Political  Economy  seems  in  danger  of  realizing  the  fate 
of  Atalanta, 

"Dccliuat  cursus,  aiirumque  volabile  tollit." 

It  has  been  remarked  by  Mr.  Mill  that  "  in  whatever 
science  there  exist,  among  those  who  have  attended  to 
the  subject,  what  are  commonly  called  differences  of 
principle,  as  distinguished  from  differences  of  matter  of 

1  The  error  as  to  method  complained  of  is  the  opposite  of  that  of  "  an- 
ticipatio  naturae,"  which  was  the  bane  of  science  when  Bacon  wrote,  and 
against  which  his  most  vigorous  attacks  were  directed.  Nevertheless  (and 
it  is  a  proof  as  well  of  the  philosophic  sagacity  for  which  he  was  so  distin 
guished,  as  of  the  perfect  sobriety  of  his  mind),  the  great  reformer  was  not 
so  carried  away  by  his  opposition  to  the  prevailing  abuse  as  to  overlook 
the  danger  of  its  opposite.  In  the  following  passage  he  describes  with 
singular  accuracy  both  the  error  itself,  to  which  I  have  adverted,  and  the 
causes  of  it.  "  Quod  si  etiam  scientiam  quandam,  et  dogmata  ex  expe- 
rimentis  moliantur ;  tamen  semper  fere  studio  praepropero  et  intempes- 
tivo  deflectunt  ad  praxin :  non  tantum  propter  usum  et  fructum  ejusmodi 
praxeos  j-  sed  ut  in  opere  aliquo  novo  veluti  pignus  sibi  arripiant,  se  non 
inutiliter  in  reliquis  versaturos :  atque  etiam  aliis  se  venditent,  ad  existi- 
mationem  ineliorem  comparandam  de  Us  in  quibus  occupati  sunt.  Jta  fit, 
ut,  more  Atalanta3,  de  via  decedant  ad  tolleudum  aureum  pomum  ;  interim 
vero  cursum  interrumpant,  et  victoriam  emittant  e  manibus." — "Novum 
Organum.''  lib.  i.  aph,  70. 


M4  LOGIC  OF  POLITICAL  EC 0X0 J/T. 

fact  or  detail,  the  cause  will  be  found  to  be  a  difference 
in  their  conceptions  of  the  philosophic  method  of  the  sci-' 
ence.  The  parties  who  differ  are  guided,  either  know 
ingly  or  unconsciously,  by  different  views  concerning 
the  nature  of  the  evidence  appropriate  to  the  subject." l 
Now  this  appears  to  me  to  be  strikingly  the  case  with  re 
spect  to  those  "  differences  of  principle"  to  which  I  have 
adverted  as  at  present  existing  among  economists ;  and, 
therefore,  I  think  I  can  not  better  carry  out  the  views 
of  the  liberal  founder  of  this  chair  than  by  availing  my 
self  of  the  opportunity  which  the  opening  of  this  course 
affords  of  considering  at  some  length  the  nature,  object, 
and  limits  of  economic  science,  and  the  method  of  in 
vestigation  proper  to  it  as  a  subject  of  scientific  study. 

In  discussing  the  nature,  limits,  and  proper  method  of 
Political  Economy,  I  shall  at  once  pass  over  those  nu 
merous  prepossessions  connected  with  the  study  of  this 
science — some  of  a  moral,  some  of  a  religious,  and  some 
of  a  psychological  nature — which  so  much  impeded  its 
early  advances.  To  enter  at  any  length  into  such  con 
siderations  would  be  to  occupy  your  time  in  traveling- 
over  ground  which  probably  you  have  already  traversed, 
or  which,  at  all  events,  it  is  in  your  power  to  traverse, 
in  other  and  more  edifying  company ;  and  to  waste  my 
own  in  combating  objections  which  either  have  ceased 
to  exist,  or,  if  they  still  exist,  exist  in  spite  of  repeated 
refutations — refutations  the  most  complete  and  irrefrag 
able,  to  which  I  could  hope  to  add  nothing  of  point  or 
weight,  and  which  I  should  only  weaken  by  translating 
them  into  my  own  language.2 

1  "Essays  on  some  Unsettled  Questions  of  Political  Economy."  p.  141. 
8  See  particularly  Whately's  "Introd.  Lectures  on  Political  Economy." 


INTRODUCTORY.  25  / 

\ 

tall,  therefore,  at  starting  take  it  for  granted  that 
N  wealth;"  the  subject-matter  of  Political  Economy,  is 
susceptible  of  scientific  treatment ;  that  there  are  laws 
of  its  production  and  distribution  ;  that  mankind  in  their 
industrial  operations  are  not  governed  by  mere  caprice 
and  accident,  but  by  motives  which  act  extensively  and 
constantly — which  may, therefore,  be  discovered  and  clas 
sified,  and  made  to  serve  as  the  principles  of  subsequent 
deductions.  I  shall  further  take  it  for  granted  that  a 
knowledge  of  these  laws  of  the  production  and  distribu 
tion  of  wealth  is  a  desirable  and  useful  acquisition,  both 
as  a  part  of  a  liberal  education,  and  for  the  practical 
purposes  to  which  it  may  be  applied ;  and,  further,  that 
this  knowledge  is  more  likely  to  be  obtained  by  careful 
and  systematic  inquiry  than  by  what  is  called' the  com 
mon-sense  of  practical  men — another  name  for  the  crude 
guesses  of  unmethodized  experience  ;  and,  lastly,  I  shall 
assume  that  the  study  of  those  principles  and  motives  of 
human  conduct  which  are  brought  into  play  in  thepur- 
suit  of  wealth  is  not  incompatible  with  the  sentiments 
and  duties  of  religion  and  morality. 


§  2.  The  question  of  the  proper  definition  of  Political 
Economy  will  come  more  fitly  under  our  consideration 
after  we  have  ascertained  with  some  precision  the  char 
acter  of  the  inquiry — that  is  to  say,  its  purpose  and  the 
conditions*  under  which  this  is  sought  to  be  accomplished. 
Even  here,  however,  it  may  be  well  to  refer  to  so  much 
as  may  be  fairly  said  to  be  agreed  upon  in  connection 
with  the  subject  of  definition — agreed  upon  not  indeed 
by  all  who  discourse  on  economic  questions  (for  on  what 
are  they  agreed  ?),  but  at  least  by  the  school  of  econo- 

B 


26  LOGIC  OF  POLITICAL  ECONOMY. 

mists  of  whom  Adam  Smith  may  be  regarded  as  the 
founder,  and  J.  S.  Mill  as  the  latest  and  most  distin 
guished  expositor.  So  far  as  I  know,  all  writers  of  this 
school,  however  they  may  differ  as  to  the  primary  as 
sumptions  of  Political  Economy,  or  the  method  by  which 
it  ought  to  be  cultivated,  at  least  agree  in  describing  it 
as  the  Science  of  Wealth.  Now  this  implies  agreement 
upon  other  points  of  considerable  importance  to  which 
I  desire  to  call  your  attention. 

.;  According  to  this  view,  then,  you  will  observe  that 
wealth  constitutes  the  proper  and  exclusive  subject-mat 
ter  of  Political  Economy  —  that  alone  with  which  it  is 
primarily  and  directly  concerned.  The  various  objections 
of  a  popular  kind  wliicli  have  been  advanced  against  the 
study  upon  the  ground,  as  it  has  been  phrased,  of  its 
"exclusive  devotion  to  wealth,"  it  is  not  my  intention  to 
notice  at  any  length,  for  reasons  which  have  been  already 
assigned.  I  shall  only  remark  that  these  objections  al 
most  all  resolve  themselves  into  this — that  there  are  mat 
ters  of  importance  which  are  not  included  within  the 
range  of  Political  Economy — an  objection  which  seems 
to  proceed  upon  the  assumption  that  Political^  Economy 
is  intended  as  a  general  curriculum  of  education,  and 
not  as  a  means  of  eliciting  truths  of  a  specific  kind.1 
Thus  a  late  writer  in  the  North  British  Review  speaks 


1  "Que  1'economie  politique  ne  s'occnpe  que  des  interets  de  cette  vie, 
c'est  une  chose  evidente,  avouee.  Chaque  science  a  son  objet  qui  lui  est 
propre.  Si  elle  sortait  de  ce  nnonde,  ce  ne  serait  plus  de  1'economie  poli 
tique,  ce  serait  la  the'ologie.  On  ne  doit  pas  plus  lui  demander  compte  de 
ce  qui  se  passe  dans  une  monde  meilleur,  qu'on  ne  doit  demander  a  la 
physiologic  comment  s'opere  la  digestion  dans  1'estomac  des  anges."— 
"Cours  Complet  d'&onomie  Politicue,"  par  J.  B.  Say,  torn.  i.  p.  48,  troi- 
sieme  edition. 


INTRODUCTORY.  27 

slightingly  of  Political  Economy  as  "  a  f ragmentary  sci 
ence."  Now  what  is  the  value  of  this  objection  ?  Does 
the  writer  mean  that  Political  Economy  is  a  fragment 
of  universal  knowledge  ?  This  may  be  granted,  and  yet 
the  point  of  the  objection  be  still  not  very  apparent,  un 
less  we  suppose  that  he  designed  to  advocate  some  "great 
and  comprehensive  science,"  such  as  that  which  Thales 
and  his  contemporaries  had  in  view  when  they  inquired, 
"What  is  the  origin  of  all  things?"  Inde^d,jf 
history  of  scientific  progress  teach  any  lesson  more  dis-  ^_ 
tinctly  than  another,  it  is  that  human  research  has  gen 
erally  been  successful  just  in  proportion  as  its  objects? 
have  been  strictly  limited  and  clearly  defined ;  that  is  to  *"* 
say,  in  proportion  as  science  has  become  "  fragmentary." 
Passing  by  popular  objections,  it  can  not  be  denied 
that  the  limitation  of  Political  Economy  to  the  single 
subject  of  wealth — or,  to  state  the  same  idea  in  a  differ 
ent  form,  the  constitution  of  a  distinct  science  for  the 
exclusive  investigation  of  the  class  of  phenomena  called 
economic — has  been  objected  to  by  writers  of  authority 
and  reputation.  Perhaps  the  most  distinguished  of  those 
who  have,  taken  this  view  has  been  M.  Comte.  Accord 
ing  to  him  all  the  various  phenomena  presented  by  soci 
ety — political,  jural,  religious,  educational,  artistic,  as  well 
as  economic — ought  to  be  comprised  within  the  range  of  a 
single  inquiry,  of  which  no  one  branch  or  portion  ought 
to  be  studied  except  in  constant  connection  with  all  the 
rest.  I  have  elsewhere  discussed  this  doctrine  of  M. 
Comte's  at  considerable  length,  and  need  not,  there 
fore,  do  more  than  refer  to  it  here.1  Other  writers,  how- 

1  See  "Essays  in  Political  Economy,  Theoretical  and  Applied." — M. 
Comte  and  Political  Economy. 


28  LOGIC  OF  POLITICAL  ECONOMY. 

ever,  of  whom  M.  Say  is  one,  without  adopting  tins  ex 
treme  view,  have  desired  to  extend  the  boundaries  of 
economic  investigation  beyond  the  limits  prescribed  by 
the  ordinary  definition,  and  would  embrace  in  the  same 
discussion  with  the  phenomena  of  wealth  a  large  por 
tion  at  least  of  the  facts  presented  by  man's  moral  and 
social  nature.  But  the  objections  to  this  course  appear 
to  me  to  be  fundamental  and  insuperable. 

In  the  first  place,  the  great  variety  of  interests  and 
considerations  included  under  the  science  as  thus  con 
ceived  would  seem  to  render  the  comprehension  of  them 
in  one  system  of  doctrines  difficult,  if  not  impracticable. 
But  the  fundamental  defect  in  this  mode  of  treatment 
—in  the  attempt  to  combine  in  the  same  discussion  the 
laws  of  wealth  and  the  lawrs,  or  a  portion  of  the  laws,  of 
the  moral  and  social  nature  of  man — consists  in  this, 
that  even  where  the  subject-matter  of  the  two  inquiries 
is  identical,  even  where  the  facts  which  they  consider 
are  the  same,  yet  the  relations  and  aspects  under  which 
these  facts  are  viewed  are  essentially  different.  The 
same  things,  the  same  persons,  the  same  actions -are  dis 
cussed  with  reference  to  a  different  object,  and,  there 
fore,  require  to  be  classified  on  a  different  principle. 

If  our  object,  for  example,  were  to  discover  the  laws 
of  the  production  and  distribution  of  wealth*  th'ose  in 
struments  of  production  the  productiveness' of  which 
depends  on  the  same  conditions,  and  those  persons  whose 
share  in  the  products  of  industry  is  governed  by  the 
same  principles,  should,  respectively,  be  placed  in  the 
same  categories;  while,  if  our  object  were  the  larger 
one  of  social  interests  and  relations  generally,  we  might 
require  a  very  different  arrangement.  Thus  superior 


INTRODUCTORY.  29 

mental  power,  regarded  with  a  view  to  the  production 
of  wealth,  is  an  instrument  of  production  perfectly  anal 
ogous  to  superior  fertility  of  soil ;  they  are  both  monop 
olized  natural  agents ;  and  the  share  which  their  owners 

O  ' 

obtain  in  the  wealth  which  they  contribute  to  produce 
is  regulated  by  precisely  the  same  principles.  Men  of 
genius,  therefore,  and  country  gentlemen,  however  little 
else  they  may  have  in  common,  yet  being  both  proprie 
tors  of  monopolized  natural  agents,  would  in  an  inquiry 
into  the  laws  of  wealth  be  properly  placed  in  the  same 
class.  In  the  same  way,  the  wages  of  a  day  laborer  and 
the  salary  of  a  minister  of  state  depend  on  the  same 
principle — the  demand  fur  and  supply  of  their  services ; 
and  these  persons,  thereforeTso^wTdeTy^  different  in  their 
social  position  and  importance,  would  be  included  by 
the  economist  in  the  same  category.  On  the  other  hand, 
farmers  and  landlords,  who,  with  a  view  to  social  inqui 
ries,  would  probably  be  ranked  together  as  belonging  to 
the  agricultural  interest,  would,  if  our  object  were  the 
narrow  one  of  the  discovery  of  the  laws  of  wealth,  be 
properly  placed  in  different  classes:  the  income  of  the 
farmer  depending  on  the  laws  which  regulate  the  rate 
of  profit,  while  that  of  the  landlord  depends  on  the  laws 
which  regulate  rent ;  those  laws  being  not  only  not  the 
same,  but  generally  varying  in  opposite  directions.1 

1  Rent  and  profit  possess  under  their  superficial  aspects  so  many  attri 
butes  in  common  that  it  is  not  strange  there  should  be  a  disposition  to 
identify  them  as  economic  phenomena  of  the  same  kind.  Among  French 
economists  in  particular  this  view  is  nearly  universal ;  not  merely  M.  Say 
and  those  who  have  generally  followed  him,  but  that  much  abler  thinker 
and  clearer  expositor,  the  late  M.  Cherbuliez,  of  Geneva,  having  so  con 
ceived  the  phenomena.  It  mav  be  well,  therefore,  to  set  down  briefly  the 
facts  which  justify  the  distinction.  1 .  The  rate  of  profit  falls,  that  of  rent 
rises,  with  the  progress  of  society :  the  latter  attains  its  maximum  in  old 


30  LOGIC  OF  POLITICAL  ECONOMY. 

As  I  have  said,  M.  Say  is  one  of  those  writers  who 
have  treated  Political  Economy  as  having  this  larger 
scope,  and  nowhere  are  the  inconveniences  of  the  meth 
od  he  pursues  more  distinctly  brought  into  view  than  in 
his  valuable  treatise  :  indeed,  it  appears  to  me  that  most 
of  the  errors  into  which,  notwithstanding  the  general 
merits  of  his  work,  he  has  fallen,  are  to  be  traced  to  this 
source.  ~£\o  one,  I  think,  can  peruse  much  of  his  writ 
ings  without  perceiving  (and  the  same  remark  may  be 
made  of  not  a  few  French  writers  on  Political  Econo 
my,  and  in  particular  of  M.  Bastiat)  that  his  reasoning 
on  economic  problems  is  throughout  carried  on  with  a 
side  glance  at  the  prevalent  socialistic  doctrines.  An 
inevitable  consequence  of  this  is — his  object  being  quite 
as  much  to  defend  society  and  property  against  the  at 
tacks  of  their  enemies  as  to  elucidate  the  theory  of 
wealth  —  that  questions  respecting  the  distribution  of 
wealth  are  constantly  confounded  with  the  wholly  dif 
ferent  questions  which  the  justification  upon  social 
grounds  of  existing  institutions  involves ;  and  thus  prob 
lems  purely  economic,  come,  under  his  treatment  of 


communities  such  as  England,  precisely  where  the  former  attains  its  mini 
mum.  2.  Rent  and  profit  stand  in  different  relations  to  price :  e.  g.,  a  rise  of 
agricultural  prices,  if  permanent,  would  imply,  other  things  being  the  same, 
a  rise  of  rent,  but  it  would  not  imply  or  be  attended  with  a  rise  of  agricult 
ural  profits ;  on  the  contrary,  agricultural  profits,  and  profits  generally, 
would  most  probably  fall  as  a  consequence  of  a  rise  in  agricultural  price's. 
3.  A  tax  on  the  profits  of  any  particular  branch  of  industry  would  raise 
prices  in  that  industry ;  the  receivers  of  profits  would  be  thus  enabled  to 
transfer  the  burden  of  the  tax  to  the  consumers  of  the  commodities  they 
produce.  A  tax  on  rent  would  have  no  corresponding  effect  on  agricult 
ural  prices,  and  would  rest  definitively  on  the  owners  of  the  soil.  4.  Va 
riations  in  rents  are  slow,  and,  as  a  rule,  in  an  upward  direction  ;  in  prof 
its,  still  more  in  interest,  variations  are  frequent  and  rapid,  and  not  in  any 
constant  direction. 


INTRODUCTORY.  31 

them,  to  be  complicated  with  considerations  which  are 
entirely  foreign  to  their  solution. 

Thus  he  tells  us1  that  rent,  interest,  and  wages  are  all 
perfectly  analogous :  each  giving  the  measure  of  utility 
which  the  productive  agency  (of  which  each  respectively 
is  the  reward)  subserves  in  production.  Rent,  according 
to  this  theory,  does  not  depend  on  the  different  costs  at 
which,  owing  to  the  physical  qualities  of  the  soil,  agri 
cultural  produce  is  raised,  nor  profit  on  the  cost  of  la 
bor,  nor  wages  on  demand  and  supply,2  but  each  on  the 
utility  of  the  functions  which  land,  capital,  and  labor 
respectively  perform  in  the  creation  of  the  ultimate 
product.  Thus  the  distinct  economic  laws  which  regu 
late  the  distribution  of  wealth  among  the  proprietors  of 
these  three  productive  agencies  are  confounded,  in  order 
to  introduce  a  moral  argument  in  defense  of  the  exist 
ing  structure  of  society,  and  to  place  the  three  classes  of 
landlords,  capitalists,  and  laborers  on  the  same  footing 
of  social  convenience  and  equity. 

Dr.  Whewell,  in  examining  the  cause  of  the  failure  of 
physical  philosophy  in  the  hands  of  the  ancient  Greeks, 
finds  it  in  the  circumstance  that  they  introduced  into 
their  physical  speculations  ideas  inappropriate  to  the 
facts  which  they  endeavored  to  solve.  It  was  .not,  he 
tells  us,  as  is  commonly  supposed,  that  they  undervalued 
the  importance  of  facts;  for  it  appears  that  Aristotle 
collected  facts  in  abundance ;  nor  yet  that  there  was 
any  dearth  of  ideas  by  which  to  generalize  the  facts 

1  "  Cours  Complet,"  torn.  i.  pp.  213-215. 

2  M.  Say,  it  is  true,  in  another  part  of  his  work  (vol.  ii.  p.  45),  states 
the  law  of  wages  correctly  as  depending  on  demand  and  supply,  but  the 
doctrine  alluded  to  in  the  text  is  no  less  distinctly  stated.     The  doctrines 
are.  no  doubt,  irreconcilable ;  but  with  this  I  am  not  concerned. 


32  LOGIC  OF  POLITICAL  ECONOMY. 

which  they  accumulated ;  but  that,  instead  of  steadily 
and  exclusively  fixing  their  attention  on  the  purely  phys 
ical  ideas  of  force  and  pressure,  they  sought  to  account 
for  external  phenomena  by  resorting  to  moral  consider 
ations — to  the  ideas  of  strange  and  common,  natural  and 
unnatural,  sympathy,  horror,  and  the  like — the  result,  of 
course,  being  that  their  inquiries  led  to  nothing  but 
fanciful  theorizing  and  verbal  quibbling.1 

Now  the  introduction  into  economic  discussions  of 
such  considerations  as  those  to  which  I  have  adverted  in 
the  example  given  from  M.  Say  appears  to  me  to  be  an 
error  of  precisely  the  same  kind  as  that  which  was  com 
mitted  by  the  ancient  Greeks  in  their  physical  specula 
tions,  and  one  to  which  the  method  adopted  by  M.  Say, 
of  embracing  in  the  same  discussion  the  principles  and 
ends  of  social  union  with  the  economic  laws  of  wealth, 
seems  almost  inevitably  to  lead.  The  writer  who  thus 
Y  treats  Political  Economy  labors  under  a  constant  terap- 
•  tation  to  wander  from  those  ideas  which  are  strictly  ap 
propriate  to  his  subject  into  considerations  of  equity  and 
expediency  which  are  proper  only  to  the  more  extensive 
subject  of  society.  Instead  of  addressing  himself  to  the 
problem,  according  to  what  law  certain  facts  result  from 
certain  principles,  he  proceeds  to  explain  how  the  exist- 

1  Sir  John  Ilerschel's  explanation  of  the  failure  is  substantially  the 
same.  "Aristotle,"  he  says,  "at  least  saw  the  necessity  of  having  re 
course  to  nature  for  something  like  principles  of  physical  science;  and, 
as  an  observer,  a  collector,  and  a  recorder  of  facts  and  phenomena,  stood 
without  an  equal  in  his  age.  It  was  the  fault  of  that  age,  and  of  the  per 
verse  and  flimsy  style  of  verbal  disputation  which  had  infected  all  learn 
ing,  rather  than  his  own,  that  he  allowed  himself  to  be  contented  with 
vague  and  loose  notions  drawn  from  general  and  vulgar  observation,  in 
place  of  seeking  carefully,  in  well-arranged  and  thoroughly  considered  in 
stances,  for  the  laws  of  nature." 


INTRODUCTORY.  33 

ence  of  the  facts  in  question  is  consistent  with  social 
well-being  and  natural  equity;  and  generally  succeeds 
in  deluding  himself  with  the  idea  that  he  has  solved  an 
economic  problem,  when,  in  fact,  he  has  only  vindicated, 
or  persuaded  himself  he  has  vindicated,  a  social  arrange 
ment.  .  • 

The  objections,  therefore,  to  this  method  of  treating 
Political  Economy,  resting  as  they  do  on  the  incompati 
ble  nature  of  the  investigations  which  it  seeks  to  com 
bine,  are  fundamental.  Even  if  it  should  be  thought 
desirable  to  give  the  name  of  Political  Economy  to  the 
larger  inquiry,  it  would  still  be  necessary  to  reserve  for 
separate  and  distinct  investigation  the  laws  of  the  pro 
duction  and  distribution  of  wealth. 


§  3.  But,  secondly* the  ordinary  definition  represents 
Political  Economy  as  a  science ;  and  (as  I  have  else 
where  said)  "for  those  who  clearly  apprehend  what  sci 
ence,  in  the  modern  sense  of  the  term,  means,  this  ought 
sufficiently  to  indicate  at  once  its  province  and  what  it 
undertakes  to  do.  Unfortunately,  many  who  perfectly 
understand  what  science  means  when  the  word  is  em 
ployed  with  reference  to  physical  nature,  allow  them 
selves  to  slide  into  a  totally  different  sense  of  it,  or  rath 
er  into  acquiescence  in  an  absence  of  all  distinct  mean 
ing  in  its  use,  when  they  employ  it  with  reference  to 
social  existence.  In  the  minds  of  a  large  number  of 
people  every  thing  is  Social  Science  which  proposes  to 
deal  with  social  facts,  either  in  the  way  of  remedying  a 
grievance,  or  in  promoting  order  and  progress  in  socie 
ty  :  every  thing  is  Political  Economy  which  is  in  any 
way  connected  with  the  production,  distribution,  or  con- 

B2 


34:  LOGIC  OF  POLITICAL   ECONOMY. 

sumption  of  wealth.  Now  I  am  anxious  here  to  insist 
upon  this  fundamental  point:  whatever  takes  the  form 
of  a  plan  aiming  at  definite  practical  ends — it  may  be  a 
measure  for  the  diminution  of  pauperism,  for  the  reform 
of  land-tenure,  for  the  extension  of  co-operative  industry, 
for  the  regulation  of  the  currency ;  or  it  may  assume  a 
more  ambitious  shape,  and  aim  at  reorganizing  society 
under  spiritual  and  temporal  powers,  represented  by  a 
high-priest  of  humanity  and  three  bankers — it  matters 
not  what  the  proposal  be,  whether  wide  or  narrow  in  its 
scope,  severely  judicious  or  wildly  imprudent'— if  its  ob 
ject  be  to  accomplish  definite  practical  ends,  then  I  say 
it  has  none  of  the  characteristics  of  a  science,  and  has  no 
just  claim  to  the  name.  Consider  the  case  of  any  rec 
ognized  physical  science — Astronomy,  Dynamics,  Chem 
istry,  Physiology — does  any  of  these  aim  at  definite  prac 
tical  ends  ?  at  modifying  in  a  definite  manner,  it  matters 
not  how,  the  arrangement  of  things  in  the  physical  uni 
verse?  Clearly  not.  In  each  case  the  object  is,  not  to 
attain  tangible  results,  not  to  prove  any  definite  thesis, 
not  to  advocate  any  practical  plan,  but  simply  to  give 
light,  to  reveal  laws  of  nature,  to  tell  us  what  phenome- 
j  Ina  are  found  together,  what  effects  follow  from  what 
I  causes.  Does  it  result  from  this  that  the  physical  sci 
ences  are  without  bearing  on  the  pra9tical  concerns  of 
mankind  ?  I  think  I  need  not  trouble  myself  to  answer 
that  question.  Well,  then,  Political  Economy  is  a  sci 
ence  in  the  same  sense  in  which  Astronomy,  Dynamics, 
Chemistry,  Physiology  are  sciences.  Its  subject-matter 
is  different ;  it  deals  with  the  phenomena  of  wealth,  while 
they  deal  with  the  phenomena  of  the  physical  universe ; 
but  its  methods,  its  aims,  the  character  of  its  concln- 


INTRODUCTORY.  35 

sions,  are  the  same  as  theirs.  What  Astronomy  does  for 
the  phenomena  of  the  heavenly  bodies ;  what  Dynamics  / 
does  for  the  phenomena  of  motion ;  what  Chemistry 
does  for  the  phenomena  of  chemical  combination  ;  what 
Physiology  does  for  the  phenomena  of  the  functions  of 
organic  life,  that  Political  Economy  does  for  the  phe 
nomena  of  wealth  \  it  expounds  the  laws  according  to 
which  those  phenomena  co-exist  with  or  succeed  each 
other;  that  is  to  say,  it  expounds  the  laws  of  the  phe 
nomena  of  wealth. 

"  Let  me  here  briefly  explain  what  I  mean  by  this  ex 
pression.  It  is  one  in  very  frequent  use  ;  but,  like  many 
other  expressions  in  frequent  use,  it  does  not  always 
perhaps  carry  to  the  mind  of  the  hearer  a  very  definite 
idea.  Of  course  I  do  not  mean  by  the  laws  of  the  phe 
nomena  of  wealth.  Acts  of  Parliament.  I  mean  the  nat-  / 
ural  laws  of  those  phenomena.  Now  what  are  the  phe 
nomena  of  wealth  ?  Simply  the  facts  of  wealth ;  such 
facts  as  production,  exchange,  price ;  or,  again,  the  vari 
ous  forms  which  wealth  assumes  in  the  process  of  distri 
bution,  such  as  wages,  profits,  rent,  interest,  and  so  forth. 
These  are  the  phenomena  of  wealth;  and  the  natural 
laws  of  these  phenomena  are  certain  constant  rela 
tions  in  which  they  stand  toward  eacli  other  and  toward 
their  causes.  For  example,  capital  grows  from  year  to 
year  in  England  at  a  certain  rate  of  progress ;  in  the 
United  States  the  rate  is  considerably  more  rapid;  in 
China  considerably  slower.  Now  these  facts  are  not 
fortuitous,  but  the  natural  result  of  causes;  of  such 
causes  as  the  external  physical  circumstances  of  the 
countries  in  question,  the  intelligence  and  moral  char 
acter  of  the  people  inhabiting  them,  and  their  political 


36  LOGIC   OF   POLITICAL   ECONOMY. 

and  social  institutions ;  and  so  long  as  the  causes  remain 
the  same,  the  results  will  remain  the  same.  Similarly, 
the  prices  of  commodities,  the  rent  of  land,  the  rates  of 
wages, .profits,. and  interest,  differ  in  different  countries; 
but  here  again,  not  at  random.  The  particular  forms 
which  these  phenomena  assume  are  no  more  matters  of 
chance  than  the  temperature  or  the  mineral  productions 
of  the  countries  in  which  they  occur  are  matters  of 
chance ;  or  than  the  fauna  or  flora  which  flourish  on  the 
surface  of  those  countries  are  matters  of  chance.  Alike 
in  the  case  of  the  physical  and  of  the  economic  world, 
the  facts  we  find  existing  are  the  results  of  causes,  be 
tween  which  and  them  the  connection  is  constant  and 
invariable.  It  is,  then,  the  constant  relations  exhibited 
in  economic  phenomena  that  we  have  in  view  when  we 
speak  of  the  laws  of  the  phenomena  of  wealth ;  and  in 
the  exposition  of  these  laws  consists  the  science  of  Polit 
ical  Economy.  If  you  ask  me  wherein  lies  the  utility 
of  such  an  exposition  of  economic  laws,  I  answer,  in  pre 
cisely  the  same  circumstance  which  constitutes  the  utility 
of  all  scientific  knowledge.  It  teaches  us  the  conditions 
of  our  power  in  relation  to  the  facts  of  economic  exist 
ence,  the  means  by  which,  in  the  domain  of  material 
well-being,  to  attain  our  ends.  It  is  by  such  knowledge 
that  man  becomes  the  minister  and  interpreter  of  Nature, 
and  learns  to  control  Nature  by  obeying  her. 

"And  now  I  beg  you  to  observe  what  follows  from  this 
mode  of  conceiving  our  study.  In  the  first  place,  then, 
you  will  remark  that,  as  thus  conceived,  Political  Econ 
omy  stands  apart  from  all  particular  systems  of  social 
or  industrial  existence.  It  has  nothing  to  do  with  laissez- 
faire  any  more  than  with  communism  ;  with  freedom  of 


INTRODUCTORY.  37 

contract  any  more  than  with  paternal  government,  or 
with  systems  of  status.  It  stands  apart  from  all  partic 
ular  systems,  and  is,  moreover,  absolutely  neutral  as  be 
tween  all.  Not  of  course  that  the  knowledge  which  it 
gives  may  not  be  employed  to  recommend  some  and  to 
discredit  others.  This  is  inevitable,  and  is  only  the  prop 
er  and  legitimate  use  of  economic  knowledge.  But  this 
notwithstanding,  the  science  is  neutral,  as  between  social 
schemes,  in  this  important  sense.  It  pronounces  no  judg 
ment  on  the  worthiness  or  desirableness  of  the  ends 
aimed  at  in  such  systems.  It  tells  us  what  their  effects 
will  be  as  regards  a  specific  class  of  facts,  thus  con 
tributing  data  toward  the  formation  of  a  sound  opinion 
respecting  them.  But  here  its  function  ends.  The  data 
thus  furnished  may  indeed  go  far  to  determine  our  judg 
ment,  but  they  do  not  necessarily,  and  should  not  in 
practice  always,  do  so.  For  there  are  few  practical  prob 
lems  which  do  not  present  other  aspects  than  the  purely 
economical — political,  moral,  educational,  artistic  aspects 
— and  these  may  involve  consequences  so  weighty  as  to 
turn  the  scale  against  purely  economic  solutions.  On 
the  relative  importance  of  such  conflicting  considera 
tions  Political  Economy  offers  no  opinion,  pronounces 
no  judgment — thus,  as  I  said,  standing  neutral  between 
competing  social  schemes ;  neutral,  as  the  science  of 
Mechanics  stands  neutral  between  competing  plans  of 
railway  construction,  in  which  expense,  for  instance,  as 
well  as  mechanical  efficiency,  is  to  be  considered ;  neu 
tral,  as  Chemistry  stands  neutral  between  competing 
plans  of  sanitary  improvement;  as  Physiology  stands 
neutral  between  opposing  systems  of  medicine.  It 
supplies  the  means,  or,  more  correctly,  a  portion  of 


38  LOGIC  OF  POLITICAL   ECONOMY. 

the  means  for   estimating  all ;    it   refuses  to  identify 
itself  with  any. 

"Now  I  desire  to  call  particular  attention  to  this  char 
acteristic  of  economic  science,  because  I  do  not  think  it 
is  at  all  generally  appreciated,  and  because  some  serious 
and  indeed  lamentable  consequences  have  arisen  from 
overlooking  it.  For  example,  it  is  sometimes  supposed 
that  because  Political  Economy  comprises  in  its^e-xposi- 
tions  theories  of  wages,  profits,  and  rent,  the  science  is 
therefore  committed  to  the  approval  of  our  present  mode 
of  industrial  life,  tinder  which  three  distinct  classes— la 
borers,  capitalists,  and  landlords — receive  remuneration  in 
those  forms.  Under  this  impression,  some  social  reform 
ers,  whose  ideal  of  industrial  life  involves  a  modification 
of  our  existing  system,  have  thought  themselves  called 
upon  to  denounce  and  deride  economic  science,  as  for 
sooth  seeking  to  stereotype  the  existing  forms  of  indus 
trial  life,  and  of  course  therefore  opposed  to  their  views. 
But  this  is  a  complete,  mistake.  Economic  science  has 
no  more  connection  with  our  present  industrial  system 
than  the  science  of  mechanics  has  with  our  present  system 
of  railways.  Our  existing  railway  lines  have  been  laid" 
down  according  to  the  best  extant  mechanical  knowl 
edge;  but  we  do  not  think  it  necessary  on  this  account, 
as  a  preliminary  to. improving  our  railways,  to  denounce 
mechanical  science.  If  wages,  profits,'  and  rent  find  a 
place  in  economic  theories,  this  is  simply  because  these 
are  the  forms  which  the  distribution  of  wealth  assumes 
as  society  is  now  constituted.  They  are  phenomena  which 
need  to  be  explained.  But  it  comes  equally  within  the 
province  of_thej3conomist  to  exhibit  the  working  of  any 
proposed  modificaHwToFthis  system,  and  to  set  forth  the 


INTRODUCTORY.  39 

operation  of  the  laws  of  production  and  distribution 
under  such  new  conditions. 

"  And,  in  connection  with  this  point,  I  may  make  this 
remark  :  that,  so  far  is  it  from  being  true,  as  some  would 
seem  to  suppose,  that  economic  science  has  done  its  work, 
and  thus  become  obsolete  for  practical  purposes,  an  ob- 
/"  ject  of  mere  historical  curiosity,  it  belongs,  on  the  con 
trary,  to  a  class  of  sciences  whose  work  can  never  be 
completed,  never  at  least  so  long  as  human  beings  con 
tinue  to  progress;  for  the  most  important  portion  of 
the  data  from  which  it  reasons  is  human  character  and 
human  institutions,  and  every  thing  consequently  which 
affects  that  character  or  those  institutions  must  create 
new  problems  for  economic  science.  Unlike  the  phys 
icist,  who  deals  with  phenomena  incapable  of  develop 
ment,  always  essentially  the  same,  the  main  facts  of  tho 
economist's  study — man  as  an  industrial  being,  man  as 
organized  in  society — are  ever  undergoing  change.  The 
economic  conditions  of  patriarchal  life,  of  Greek  or  Ro 
man  life,  of  feudal  life,  are  not  the  economic  conditions 
of  modern  commercial  life ;  and  had  Political  Economy 
been  cultivated  in  those  primitive,  ancient,  or  mediaeval 
times,  while  it  would  doubtless  have  contained  some  ex 
positions  which  we  do  not  now  find  in  it,  it  must  also  have 
wanted  many  which  it  now  contains.  One  has  only  to 
turn  to  the  discussions  on  currency  and  credit  which  have 
accompanied  the  great  development  of  England's  com 
merce  during  the  last  half-century  to  see  how  the  changing 
needs  of  an  advancing  society  evolve  new  problems  for 
the  economist,  and  call  forth  new  growths  of  economic 
doctrine.  At  this  moment  one  may  see  that  such  an  oc 
casion  is  imminent.  Since  the  economic  doctrines  now 


40  LOGIC  OF  POLITICAL  ECONOMY. 

holding  their  place  in  English  text-books  were  thought 
out,  a  new  mode  of  industrial  organization  has  established 
itself  in  Great  Britain  and  other  countries.  Co-operation 
is  now  a  reality,  and,  if  the  signs  are  not  all  deceptive,  bids 
fair  to  transform  much  of  England's  industry.  Now  the 
characteristic  feature  of  co-operation,  looked  at  from  the 
economic  point  of  view,  is  that  it  combines  in  the  same  per 
son  the  two  capacities  of  laborer  and  capitalist ;  whereas 
our  present  theories  of  industrial  remuneration  presuppose 
a  division  of  those  capacities  between  distinct  persons. 
Obviously,  our  existing  theories  must  fail  to  elucidate  a 
state  of  things  different  from  that  contemplated  in  their 
elaboration.  We  have  thus  need  of  a  new  exposition  of 
the  law  of  industrial  remuneration — an  exposition  suited 
to  a  state  of  tilings  in  which  the  gains  of  producers,  in 
stead  of  taking  the  form  of  wages,  profits,  and  rent,  are 
realized  in  a  single  composite  sum.  I  give  this  as  an 
example  of  the  new  developments  of  economic  theory 
which  the  progress  of  society  will  constantly  call  for. 
Of  course  it  is  an  open  question  whether  this  is  the  di 
rection  in  which  industrial  society  is  moving;  and  there 
are  those,  I  know,  who  hold  that  it  is  not  toward  co-op 
eration,  but  rather  toward  'captains  of  industry'  and 
organization  of  workmen  on  the  military  plan,  that  the 
current  is  setting.  It  may  be  so,  and  in  this  case  the 
economic  problem  of  the  future  will  not  be  that  which 
I  have  suggested  above ;  nevertheless,  an  economic  prob 
lem  there  still  will  be.  If  society  were  organized  to 
morrow  on  the  principles  of  M.  Comte,  so  long  as  phys 
ical  and  human  nature  remain  what  they  are,  the  phe 
nomena  of  wealth  would  exhibit  constant  relations,  would 
still  be  governed  by  natural  laws;  and  those  relations, 


INTRODUCTORY.  41 

those  laws,  it  would  still  be  important  to  know.     The 
function  of  the  economist  would  be  as  needful  as  ever. 

"A  far  more  serious  consequence,  however,  of  ig 
noring  the  neutral  attitude  of  this  study  in  relation  to 
questions  of  practical  reform  is  the  effect  it  has  had  in 
alienating^  from  it  the  minds  of  the  working  classes.  In 
stead  of  appearing  in  the  neutral  guise  of  an  expositor  of 
truths,  the  contributor  of  certain  data  toward  the  solu 
tion  of  social  problems — data  which  of  themselves  com 
mit  no  man  to  any  course,  and  of  which  the  practical  co 
gency  can  only  be  determined  after  all  the  other  data 
implicated  in  the  problem  are  known — instead  of  pre 
senting  itself  as  Chemistry, Physiology, Mechanics  present 
themselves,  Political  Economy  too  often  makes  its  ap 
pearance,  especially  in  its  approaches  to  the  working 
classes,  in  the  guise  of  a  dogmatic  code  of  cut-and-dried 
rules,  a  system  promulgating  decrees, ( sanctioning'  one 
social  arrangement,  'condemning'  another,  requiring 
from  men,  not  consideration,  but  obedience.  Now  when 
we  take  into  account  the  sort  of  decrees  which  are  ordi 
narily  given  to  the  world  in  the  'name  of  Political  Econ 
omy —  decrees  which  I  think  I  may  say  in  the  main 
amount  to  a  handsome  ratification  of  the  existing  form 
of  society  as  approximately  perfect — I  think  we  shall 
be  able  to  understand  the  repugnance,  and  even  violent 
opposition,  manifested  toward  it  by  people  who  have 
their  own  reasons  for  not  cherishing  that  unbounded  ad 
miration  for  our  present  industrial  arrangements  which 
is  felt  by  some  popular  expositors  of  so-called  economic 
laws.  When  a  working  man  is  told  that  Political  Econ- 

O 

omy  *  condemns'  strikes,  hesitates  about  co-operation, 
looks  askance  at  proposals  for  limiting  the  hours  of  labor, 


42  LOGIC    OF   POLITICAL    ECONOMY. 

but  c approves'  the  accumulation  of  capital,  and  ' sanc 
tions  '  the  market  rate  of  wages,  it  seems  not  an  unnat 
ural  response  that  '  since  Political  Economy  is  against 
the  working  man,  it  behooves  the  working  man  to  be 
against  Political  Economy.'  It  seems  not  unnatural  that 
tliis  new  code  should  come  to  be  regarded  with^suspicion, 
as  a  system  possibly  contrived  in  the  interest  of  employ 
ers,  which  it  is  the  workmen's  wisdom  simply  to  repudiate 
and  disown.  Economic  science  is  thus  placed  in  an  es 
sentially  false  position,  and  the  section  of  the  community 
which  is  most  vitally  interested  in  taking  to  heart  its 
truths  is  effectually  prevented  from  even  giving  them  a 
hearing.  I  think  it,  therefore,  a  matter  not  merely  of 
theoretic  but  of  the  utmost  practical  importance,  that 
the  strictly  scientific  character  of  this  study  should  be 
insisted  upon.  It  is  only  when  so  presented  that  its  true 
position  in  relation  to  practical  reforms,  and  its  really 
benevolent  bearing  toward  all  sorts  and  conditions  of 

O 

men,  will  be  understood,  and  that  we  can  hope  to  over 
come  those  deep-seated  but  perfectly  natural  prejudices 
with  which  the  most  numerous  class  in  the  community 
unfortunately  regard  it." ' 

1  "Essnys  in  Political  Economy,  Theoretical  and  Applied,"  pp.  '252- 
201. 


(  Library. 

X^j 


LECTURE  II. 

OF  THE  MENTAL  AND  PHYSICAL  PREMISES  OF  PO 
LITICAL  ECONOMY,  AND  OF  THE  LOGICAL 
CHARACTER  OF  THE  DOCTRINES 
THENCE  DEDUCED. 

§  1.  Ix  my  last  lecture  I  called  attention  to  the  con 
ception  of  Political  Economy  formed  by  the  leading 
writers  on  the  subject  in  England,  and  in  particular  I 
took  occasion  to  point  out  the  significance  of  the  words 
wThich  describe  it  as  the  "  Science  of  Wealth."  We  have 
now  reached  a  point  at  which  it  may  be  well  to  attempt 
some  more  precise  determination  of  its  character  and 
scope,  and,  with  a  view  to  this,  to  consider  the  position 
occupied  by  economic  speculation  in  relation  to  the 
two  great  departments  of  existence — matter  and  mind. 
With  regard  to  this  aspect  of  the  case,  the  following 
theory  has  been  advanced  by  high  authorities: 

"  In  all  the  intercourse  of  man  with  nature,  whether  we 
consider  him  as  acting  upon  it,  or  as  receiving  impressions 
from  it,  the  effect  or  phenomenon  depends  upon  causes  of 
two  kinds  :  the  properties  of  the  object  acting,  and  those 
of  the  object  acted  upon.  Every  thing  which  can  possibly 
happen,  in  which  man  and  external  things  are  jointly  con 
cerned,  results  from  the  joint  operation  of  a  law  or  laws 
of  matter  and  a  law  or  laws  of  the  human  mind.  Thus  the 
production  of  corn  by  human  labor  is  the  result  of  a  law 
of  mind  and  many  laws  of  matter.  The  laws  of  matter 


4/j.  THE  CHARACTER   OF 

are  those  properties  of  the  soil  and  of  vegetable  life  which 
cause  the  seed  to  germinate  in  the  ground,  and  those  prop 
erties  of  the  human  body  which  render  food  necessary 
to  its  support.  The  law  of  rnind  is  that  man  desires  to 
possess  subsistence,  and  consequently  wills  the  necessary 
means  of  procuring  it.  Laws  of  mind  and  laws  of  matter 
are  so  dissimilar  in  their  nature  that  it  would  be  contrary 
to  all  principles  of  rational  arrangement  to  mix  them  up 
as  part  of  the  same  study.  In  all  scientific  methods,  there 
fore,  they  are  placed  apart.  Any  compound  effect  or  phe 
nomenon  which  depends  both  on  the  properties  of  matter 
and  on  those  of  mind  may  thus  become  the  subject  of  two 
completely  distinct  sciences,  or  branches  of  science  :  one 
treating  of  the  phenomenon  in  so  far  as  it  depends  upon 
the  laws  of  matter  only;  the  other  treating  of  it  in  so  far 
as  it  depends  upon  the  laws  of  mind. 

"The  physical  sciences  are  those  which  treat  of  the  laws 
of  matter,  and  of  all  complex  phenomena,  in  so  far  as  de 
pendent  upon  the  laws  of  matter.  The  mental  or  moral 
sciences  are  those  which  treat  of  the  laws  of  mind,  and  of 
all  complex  phenomena,  in  so  far  as  dependent  upon  the 
laws  of  mind.  Most  of  the  moral  sciences  presuppose 
physical  science  ;  but  few  of  the  physical  sciences  presup 
pose  moral  science.  The  reason  is  obvious.  There  are 
many  phenomena  (an  earthquake,  for  example,  or  the  mo 
tions  of  the  planets)  which  depend  upon  the  laws  of  matter 
exclusively,  and  have  nothing  whatever  to  do  with  the 
laws  of  mind.  Many  of  the  physical  sciences  may  be 
treated  of  without  any  reference  to  mind,  and  as  if  the 
mind  existed  as  a  recipient  of  knowledge  only,  not  as  a 
cause  producing  effects.  But  there  are  no  phenomena 
which  depend  exclusively  upon  the  laws  of  mind;  even  the 
phenomena  of  the  mind  itself  being  partially  dependent 
upon  the  physiological  laws  of  the  body.  All  the  mental 
sciences,  therefore,  not  excepting  the  pure  science  of  mind, 
must  take  account  of  a  great  variety  of  physical  truths  ; 
and  (as  physical  science  is  commonly  and  very  proper 
ly  studied  first)  may  be  said  to  presuppose  them,  takin^ 


POLITICAL  ECONOMY.  45 

up  the  complex  phenomena  where  physical  science  leaves 
them. 

."  Now  this,  it  will  be  found,  is  a  precise  statement  of  the 
relation  in  which  Political  Economy  stands  to  the  various 
sciences  which  are  tributary  to  the  arts  of  production. 

"  The  laws  of  the  production  of  the  objects  which  con 
stitute  wealth  are  the  subject-matter  both  of  Political 
Economy  and  of  almost  all  the  physical  sciences.  Such, 
however,  of  those  laws  as  are  purely  laws  of  matter  belong 
to  physical  science,  and  that  exclusively.  Such  of  them  as 
are  laws  of  the  human  mind,  and  no  others,  belong  to  Po 
litical  Economy,  which  finally  sums  up  the  result  of  both 
combined." 1 

The  view  here  set  forth  has  been  accepted  by  another 
high  authority,  Mr.  Senior,  who,  in  an  article  in  the  Ed 
inburgh  Review  (Oct.,  1848),  comments  as  follows  upon 
the  passage  just  cpoted : 

"  The  justice  of  these  views,  we  think,  is  obvious ;  and, 
though  they  are  now  for  the  first  time  formally  stated,  an 
indistinct  perception  of  them  must  be  general,  since  they 
are  generally  acted  on.  The  Political  Economist  does  not 
attempt  to  state  the  mechanical  and  chemical  laws  which 
enable  the  steam-engine  to  perform  its  miracles.  He  passes 
them  by  as  laws  of  matter;  but  he  explains  as  fully  as  his 
knowledge  will  allow  the  motives  which  induce  the  mech 
anist  to  erect  the  steam-engine  and  the  laborer  to  work 
it :  and  these  are  laws  of  mind.  He  leaves  to  the  geolo 
gist  to  explain  the  laws  of  matter  which  occasion  the  for 
mation  of  coal;  to  the  chemist,  to  distinguish  its  compo 
nent  elements;  to  the  engineer,  to  state  the  means  by  which 
it  is  extracted;  and  to  the  teachers  of  many  hundred  dif 
ferent  arts  to  point  out  the  uses  to  which  it  may  be  ap 
plied.  What  he  reserves  to  himself  is  to  explain  the  laws 

1  "Essays  on  some  Unsettled  Questions  in  Political  Economy,"  by  J. 
S.  Mill,  pp.  130-132. 


40  THE  CHARACTER   OF 

of  mind  under  which  the  owner  of  the  soil  allows  his  past 
ures  to  be  laid  waste,  and  the  minerals  which  they  cover 
to  be  abstracted ;  under  which  the  capitalist  employs  in 
sinking  shafts  and  piercing  galleries  funds  which  might 
be  devoted  to  his  own  immediate  enjoyment ;  under  which 
the.  miner  encounters  the  toils  and  the  dangers  of  his  haz 
ardous  and  laborious  occupation ;  and  the  laws,  also  laws 
of  mind,  which  decide  in  what  proportions  the  produce  or 
the  value  of  the  produce  is  divided  between  the  three 
classes  by  whose  concurrence  it  has  been  obtained.  When 
lie  uses  as  his  premises,  as  he  often  must  do,  facts  supplied 
by  physical  science,  lie  does  not  attempt  to  account  for 
them." 

The  concluding  sentence  in  the  passage  taken  from 
Mr.  Mill's  Essay,  in  which  he  says  that  Political  Econo 
my  "finally  sums  up  the  result  of  both  [laws  of  mind 
and  of  matter]  combined/'  seems  to  me  to  describe  cor 
rectly  the  function  of  the  science,  but  to  be  inconsistent 
with  the  tenor  of  the  remarks  which  precede  it,  as  it  is 
plainly  inconsistent  with  Mr.  Senior's  interpretation  of 
the  passage.  Excluding  that  sentence,  the  effect  of  the  ex 
position  is  that  Political  Economy  belongs  to  the  group 
of  sciences  "  which  treats  of  the  laws  of  mind,  and  of 
all  complex  phenomena,  in  so  far  as  dependent  upon  the 
laws  of.  mind,"  and  is,  therefore,  properly  described  as  a 
"mental"  or  "moral"  science;  while  its  relation  to  the 
world  of  matter  being  of  a  different  and  altogether  less 
intimate  character,  it  is  properly  kept  apart  from  the 
physical  group.  The  facts  and  laws  of  material  nature 
it  takes  for  granted  ;  but  the  facts  and  laws  of  mind,  so 
far  as  these  are  involved  in  the  production  and  distribu 
tion  of  wealth,  constitute  its  proper  province,  furnishing 
the  phenomena  of  which  it  "  treats"  and  which  it  "  ex^- 


POLITICAL   ECONOMY.  47 

plains."  To  this  effect,  it  seems  to  me,  is  tlie  view  fair 
ly  deductible  from  the  passages  I  have  quoted ;  and,  so 
far  as  I  know,  the  doctrine,  as  I  have  stated  it,  has  been 
generally  acquiesced  in  by  later  writers.  Kow  from  this 
view  of  the  character  of  Political  Economy  I  venture  to 
dissent.  It  appears  to  me  that  the  laws  and  phenomena 
of  wealth  which  it  belongs  to  this  science  to  explain  de 
pend  equally  on  physical  and  on  mental  laws ;  that  Po 
litical  Economy  stands  in  precisely  the  same  relation  to 
physical  and  to  mental  nature  ;  and  that,  if  it  is  to  be 
ranked  in  either  of  these  departments  of  speculation,  it 
is  as  well  entitled  to  be  placed  in  the  one  as  in  the  other. 
The  expressions  "physical"  and  "mental,"  as  applied 
to  science,  have  generally  been  employed  to  designate 
those  branches  of  knowledge^  of  which  physical  and 
mental  phenomena  respectively  form  the  subject-matter. 
Thus  Chemistry  is  considered  as  a  physical  science  be 
cause  the  subject-matter  011  which  chemical  inquiry  is 
exercised,  viz.,  material  elements  and  combinations,  is 
physical.  Psychology,  on  the  other  hand,  is  a  mental 
science ;  the  subject-matter  of  it  being  mental  states  and 
feelings.  And  as  the  office  of  the  chemist  consists  in 
observing  and  analyzing  material  objects  with  a  view  to 
discovering  the  laws  of  their  elementary  constitution, 
so  that  of  the  psychologist  consists  in  endeavoring,  by 
means  of  reflection  on  what  passes  in  his  own,  or  appears 
to  pass  in  the  minds  of  others,  to  ascertain  the  laws  by 
which  the  phenomena  of  our  mental  constitution  succeed 
and  produce  each  other.  If  this  be  a  correct  statement 
of  the  principle  on  which  the  designations  "mental"  and 
"physical"  are  applied  to  the  sciences,  it  seems  to  fol 
low  that  Political  Economy  does  not  iind  a  place  under 


48  THE   CHARACTER   OF 

either  category.  Neither  mental  nor  physical  nature 
forms  the  subject-matter  of  the  investigations  of  the  po 
litical  economist.  He  considers,  it  is  true,  physical  phe 
nomena,  as  lie  also  considers  mental  phenomena,  but  in 
neither  case  as  phenomena  which  it  belongs  to  his  science 
to  explain.  The  subject-matter  of  that  science  is  wealth ; 
and  though  wealth  consists  in  material  objects,  it  is  not 
wealth  in  virtue  of  those  objects  being  material,  but  in 
virtue  of  their  possessing  value — that  is  to  say,  in  virtue 
of  their  possessing  a  quality  attributed  to  them  by  the 
mind.  The  subject-matter  of  Political  Economy  is  thus 
neither  purely  physical  nor  purely  mental,  but  possesses 
a  complex  character,  equally  derived  from  both  depart 
ments  of  nature,  and  the  laws  of  which  are  neither  men 
tal  nor  physical  laws,  though  they  are  dependent,  and, 
as  I  maintain,  dependent  equally  on  the  laws  of  matter 
and  on  those  of  mind. 

Let  us  consider,  for  example,  the  causes  which  deter 
mine  the  rate  of  wages.  This,  it  will  be  admitted  on  all 
hands,  is  an  economic  problem.  It  is  evident  that  the 
objects  which  the  laborer  receives  are  material  objects, 
but  those  material  objects  are  invested  by  the  mind  with 
a  peculiar  attribute  in  consequence  of  which  they  are 
considered  as  possessing  value ;  and  it  is  in  their  com 
plex  character,  as  physical  objects  invested  with  the  at 
tribute  of  value,  that  the  political  economist  considers 
them.  The  subject-matter,  therefore,  of  the  wages-prob 
lem  possesses  qualities  derived  alike  from  physical  and 
from  mental  nature;  consequently,  if  it  is  to  be  denomi 
nated  from  the  nature  of  its  subject-matter,  it  is  equally 
entitled  or  disentitled  to  the  character  of  a  physical  or 
mental  problem. 


POLITICAL  ECONOMY.  49 

But  it  is  said  that  Political  Economy  considers  the 
problem  no  further  than  as  it  depends  on  the  action  of 
the  human  mind.  The  food  and  clothing  which  the  la 
borer  consumes  have,  no  doubt,  physical  properties,  as 
the  laborer  himself  has  a  physical  as  well  as  a  mental 
nature ;  but  with  the  physical  properties,  we  are  told, 
the  political  economist  has  no  concern :  he  considers 
those  objects  so  far  forth  only  as  they  possess  value,  and 
value  is  a  purely  mental  conception.  But  is  this  true? 
Does  the  political  economist  —  does  Mr.  Senior,  e.  g.,  in 
his  purely  scientific  treatment  of  this  question — entirely 
put  out  of  consideration  the  physical  properties  of  the 
commodities  which  the  laborer  consumes,  or  the  physio 
logical  conditions  on  which  the  increase  of  the  laboring 
population  depends  ?  What  is  the  solution  of  the  wages- 
problem  ?  Wages,  it  will  be  said,  depend  on  demand  and 
supply ;  or,  more  explicitly,  on  the  relation  between  the 
amount  of  capital  applied  to  the  payment  of  wages  and 
the  number  of  laborers  seeking  employment.  But  the 
amount  of  capital  employed  in  the  payment  of  wages 
depends,  among  other  causes,  on  the  productiveness  of 
industry  in  raising  the  commodities  of  the  laborer's  con 
sumption — a  circumstance  which  is  equally  dependent 
on  the  laws  of  physical  nature  and  on  the  mental  quali 
ties  which  the  workman  brings  to  his  task.  The  number 
of  laborers  seeking  employment,  again,  depends,  among 
other  causes,  on  the  law's  of  population ;  while  these  are 
determined  as  much  by  the  physiological  laws  of  the 
body  as  the  psychological  laws  of  the  mind,  the  polit 
ical  economist  taking  equal  cognizance  of  both. 

It  thus  appears  that  as  the  subject-matter  of  Political 
Economy,  viz.,  wealth,  possesses  qualities  derived  equally 

C 


50  THE   CHARACTER   OF 

from  the  world  of  matter  and  from  that  of  mind,  so  its 
premises  are  equally  drawn  from  both  these  departments 
of  nature.  The  latter  point,  indeed,  is  admitted  by  the 
authorities  to  whom  I  have  referred,  who,  nevertheless, 
by  what  I  must  deem  a  strange  oversight,  represent  the 
science  as  investigating  the  laws  of  wealth  no  further 
than  as  they  depend  on  the  laws  of  the  human  mind. 

But  perhaps  this  point  will  be  made  more  clear — the 
equal  dependence,  namely,  of  the  science  of  Political 
Economy  on  the  laws  of  the  physical  world  and  on  those 
of  the  human  mind — if  we  consider  that  a  change  in  the 
character  of  the  former  laws  will  equally  affect  its  con 
clusions  with  a  change  in  that  of  the  latter.  The  phys 
ical  qualities  of  the  soil,  e.  g.,  under  the  present  constitu 
tion  of  nature,  are  such  that,  after  a  certain  quantum  of 
cultivation  has  been  applied  to  a  limited  area,  a  further 
application  is  not  attended  with  a  proportionate  return. 
The  proof  of  this  is  that,  instead  of  confining  cultiva 
tion  to  the  best  soils,  and  forcing  them  to  yield  the  whole 
amount  of  food  that  may  be  required,  it  is  found  profit 
able  to  resort  to  soils  of  inferior  quality.1 


1  This  doctrine  has  been  denied,  and  some  curious  arguments  have  been 
advanced  in  refutation  of  it.  The  topic  most  insisted  on  by  those  who 
controvert  it  is  the  superior  productiveness  of  agricultural  industry  in  the 
United  Kingdom  at  present,  as  compared  with  that  which  prevailed  in 
former  periods,  notwithstanding  the  greater  amount  of  capital  now  em 
ployed  in  agriculture.  This  argument  would  be  good  for  something  if  all 
the  other  conditions  of  the  problem  were  the  same ;  but  it  is  certain  that 
they  are  not  the  same,  and  that  they  differ  precisely  in  the  point  that  is 
of  importance — the  superior  skill  with  which  capital  and  industry  are  at 
present  applied.  No  economist  that  I  am  aware  of  has  ever  said  that  a 
small  and  unskillful  implication  of  capital  to  land  would  necessarily  be  at 
tended  with  greater  proportional  returns  than  a  larger  outlay  more  skill 
fully  applied  ;  and  it  is  to  this  assertion  only  that  the  argument  in  ques 
tion  applies. 


POLITICAL  ECONOMY.  51 

This  physical  fact,  as  every  political  economist  knows, 
and  as  shall  be  explained  on  a  future  occasion,  leads, 
through  the  play  of  human  desires  in  the  pursuit  of 
wealth,  to  the  phenomenon  of  rent,  to  the  fall  of  profits 
as  communities  advance,  and  to  a  retardation  in  the  ad- 

But  it  is  important  to  remark  that  the  attempt  to  meet  the  doctrine  in 
question  by  statistical  data  implies  (as  will  hereafter  more  clearly  appear) 
a  total  misconception,  both  of  the  fact  which  is  asserted  and  of  the  kind 
of  proof  which  an  economic  doctrine  requires.  The  doctrine  contains,  not 
a  historic  generalization  to  be  tested  by  documentary  evidence,  but  a  state 
ment  as  to  an  existing  physical  fact,  which,  if  seriously  questioned,  can  only 
be  conclusively  determined  by  actual  experiment  upon  the  existing  soil. 
If  any  one  denies  the  fact,  it  is  open  to  him  to  refute  it  by  making  the  ex 
periment.  Let  him  show  that  he  can  obtain  from  a  limited  area  of  soil 
any  required  quantity  of  produce  by  simply  increasing  the  outlay — that  is 
to  say,  that  by  quadrupling  or  decupling  the  outlay  he  can  obtain  a  quad 
ruple  or  decuple  return.  If  it  be  asked  why  those  who  maintain  the  af 
firmative  of  the  doctrine  do  not  establish  their  view  by  actual  experiment, 
the  answer  is  that  the  experiment  is  performed  for  them  by  every  prac 
tical  farmer  ;  and  that  the  fact  of  the  diminishing  productiveness  of  the 
soil  is  proved  by  their  conduct  in  preferring  to  resort  to  inferior  soils  rath 
er  than  force  unprofitably  soils  of  better  quality. 

Mr.  Carey,  the  American  economist,  has  endeavored  to  meet  this  rea 
soning  by  urging  that  the  conduct  of  farmers  in  resorting  to  inferior  soils 
after  the  better  qualities  have  been  all  taken  into  cultivation,  no  more  consti 
tutes  a  proof  that  industry  on  the  superior  soils  has  become  less  produc 
tive  than  the  conduct  of  a  cotton-spinner  in  building  a  second  factory 
when  his  first  is  full  is  a  proof  that  manufacturing  industry  tends  to  become 
less  productive  as  manufacturing  capital  and  labor  increase.  This  is,  in 
other  words,  to  say  that  the  reason  farmers  do  not  increase  their  outlay 
on  the  soils  of  superior  quality  is,  not  because  it  would  be  unprofitable  to 
do  so,  but  for  the  same  reason  which  limits  the  amount  of  capital  and  the 
number  of  hands  employed  in  a  cotton-mill,  namely,  that,  the  necessary 
conditions  of  space  being  taken  into  account,  it  would  be  impossible  to  do 
so.  No  one  who  holds  the  received  theory  of  rent  will  hesitate  to  stake 
the  doctrine  upon  the  issue.  When  any  sane  farmer  in  the  United  King 
dom,  or  in  any  other  quarter  of  the  civilized  world,  will  give  the  same  an 
swer  to  the  question,  "Why  he  does  not  manure  more  highly,  or  drain 
more  deeply,  or  plow  moi-e  frequently,  a  given  field  ?"  which  Mr.  Carey 
gives,  viz.,  "want  of  room,"  the  disciples  of  Ricardo  will  be  prepared  to 
abandon  their  master ;  but  till  this  specimen  of  bucolic  exegesis  is  pro 
duced  they  will  probably  retain  their  present  views. 


52  THE   CHARACTER   OF 

vance  of  population.  If  the  fact  were  otherwise — if  the 
physical  properties  of  the  soil  were  such  as  to  admit  of 
an  indefinite  increase  of  produce  in  undiminished  pro 
portion  to  the  outlay  by  simply  increasing  the  outlay — 
if,  e.  g.,  it  were  found  that  by  doubling  the  quantity  of 
manure  upon  a  given  acre  and  by  plowing  it  twice  as 
often,  a  farmer  could  obtain  a  double  produce,  and  by  a 
quadruple  outlay  a  quadruple  produce,  and  so  on  ad  in- 
finitum;  if  this  were  so,  the  science  of  Political  Econ 
omy,  as  it  at  present  exists,  would  be  as  completely 
revolutionized  as  if  human  nature  itself  were  altered — 
as  if  benevolence,  for  example,  were  so  strengthened  at 
the  expense  of  self-love  that  human  beings  should  refuse 
to  avail  themselves,  at  the  expense  of  their  neighbors,  of 
those  special  advantages  with  which  nature  or  fortune 
may  happen  to  endow  them  ;  under  such  a  change  in  the 
physical  qualities  of  the  soil  rent  would  disappear,  profits 
would  have  no  tendency  permanently  to  fall,  and  pop 
ulation  in  the  oldest  countries  might  advance  as  rapidly 
as  iii  the  newest  colonies. 

I  am,  therefore,  disposed  to  regard  Political  Economy 
as  belonging  neither  to  the  department  of  physical  nor 
to  that  of  mental  inquiry,  but  as  occupying  an  interme 
diate  position,  and  as  referable  to  the  class  of  studies 
which  includes  historical,  political,  and,  in  general,  social 
investigations.  The  class  appears  to  me  to  be  a  class  sui 
generis,  having  for  its  subject-matter  the  complex  phe 
nomena  presented  by  the  concurrence  of  physical,  phys 
iological,  and  mental  laws,  and  for  its  function  the  trac 
ing  of  such  phenomena  to  their  physical,  physiological, 
and  mental  causes. 

Thus,  to  take  an  example  from  Political  Economy,  rent 


POLITICAL    ECONOMY.  53 

is  a  complex  phenomenon,  arising  (as  lias  been  already 
intimated)  from  the  play  of  human  interests  when  brought 
into  contact  with  the  actual  physical  conditions  of  the 
soil  in  relation  to  the  physiological  character  of  vegetable 
^productions.  If  these  physical  conditions  were  different, 
if  capital  and  labor  could  be  applied  to  a  limited  por 
tion  of  the  soil  indefinitely  with  undiminished  return,  a 
small  portion  only  of  the  best  land  in  the  country  would 
be  cultivated,  and  no  farmer  would  consent  to  pay  rent ; 
on  the  other  hand,  if  the  principle  of  self-interest  were 
absent,  no  landlord  would  exact  it.  Both  conditions  are 
indispensable,  and  equally  indispensable,  to  the  existence 
of  rent :  they  are  the  premises  from  which  the  theory 
is  deduced.  It  is  for  the  political  economist  to  prove, 
first,  that  the  premises  are  true  in  fact;  and,  secondly, 
that  they  account  for  the  phenomenon ;  but  when  this  is 
clone,  his  business  is  ended.  lie  does  not  attempt  to 
explain  the  physical  laws  on  which  the  qualities  of  the 
soil  depend ;  and  no  more  does  he  undertake  to  analyze 
the  nature  of  those  feelings  of  self-interest  in  the  minds 
of  the  landlord  and  tenant  which  regulate  the  terms  of 
the  bargain.  lie  regards  them  both  as  facts,  not  to  be 

O  O  / 

analyzed  and  explained,  but  to  be  ascertained  and  taken 
account  of ;  not  as  the  subject-matter,  but  as  the  basis  of 
his  reasonings.  If  further  information  be  desired,  re 
course  must  be  had  to  other  sciences :  the  physical  fact 
he  hands  over  to  the  chemist  or  the  physiologist;  the 
montal  to  the  psychological  or  the  ethical  scholar. 
v  In  the  considerations  just  adduced,  we  may  perceive 
what  the  proper  limits  are  of  economic  inquiry — at  what 
point  the  economist,  in  tracing  the  phenomena  of  wealth 
to  their  causes  and  laws,  may  properly  stop  and  consider 


54  THE    CHARACTER    OF 

his  task  as  completed,  his  problem  as  solved.  It  is  pre 
cisely  at  that  point  at  which  in  the  course  of  his  reason 
ings  he  finds  himself  in  contact  with  some  phenomenon 
not  economic,  with  some  physical  or  mental  fact,  some 
political  or  social  institution.  So  soon  as  he  has  traced 
the  phenomena  of  wealth  to  causes  of  this  order,  he  has 
reached  the  proper  goal  of  his  researches;  and  such 
causes,  therefore,  are  properly  regarded  as  "  ultimate " 
in  relation  to  economic  science.  Not  that  they  may  not 
deserve  and  admit  of  further  analysis  and  explanation, 
but  that  this  analysis  and  explanation  is  not  the  business 
of  the  economist — is  not  the  specific  problem  which  he 
undertakes  to  solve.1 

The  position  of  Political  Economy,  as  just  described, 
may  be  illustrated  by  that  of  Geology  in  relation  to  the 
sciences  of  Mechanics,  Chemistry,  and  Physiology.  The 
complex  phenomena  presented  by  the  constitution  of  the 
earth's  crust  form  the  subject-matter  of  the  science  of 
the  geologist ;  they  are  the  complex  result  of  mechanical, 
chemical,  and  physiological  laws,  and  the  business  of  the 
geologist  is  to  trace  them  to  these  causes;  but  having 
done  this,  his  labors  as  a  geologist  are  at  an  end :  the 
further  investigation  of  the  problem  belongs  not  to  Ge 
ology,  but  to  Mechanics,  Chemistry,  and  Physiology. 

§  2.  The  premises,  or  ultimate  facts,  of  Political  Econ 
omy  being  thus  drawn  alike  from  the  world  of  matter 
and  from  that  of  mind,  it  remains  that  I  should  indicate 
the  character  of  those  facts,  physical  and  mental,  from 
which  the  conclusions  of  the  science  are  derived ;  in 

1  Appendix  B. 


POLITICAL   EC 0X0 MY.  55 

other  words,  that  I  should  show  in  what  manner  the  facts 
which  are  pertinent  to  economic  investigations  are  to  be 
distinguished  from  those  which  are  not.  The  answer  to 
this  question  must  in  general  be  determined  by  consider 
ing  what  the  science  proposes  to  accomplish.  This,  as 
you  are  aware,  is  the  discovery  of  the  laws  of  the  pro 
duction  and  distribution  of  wealth.  The  facts,  therefore, 
which  constitute  the  premises  of  Political  Economy  are 
those  which  influence  the  production  and  distribution  of 
wealth ;  and  in  order  that  the  science  be  absolutely  per 
fect,  so  that  an  economist  might  predict  the  course  of 
economic  phenomena  with  the  same  accuracy  and  cer 
tainty  with  which  an  astronomer  predicts  the  course  of 
celestial  phenomena,  it  would  be  necessary  that  these 
premises  should  include  every  fact,  mental  and  physical, 
which  influences  the  phenomena  of  wealth. 

It  does  not,  however,  seem  possible  that  this  degree  of 
perfection  should  ever  be  attained.  In  Political  Econ 
omy,  as  in  all  those  branches  of  inquiry  which  include 
among  their  premises  at  once  the  moral  and  physical 
nature  of  man,  the  facts  to  be  taken  account  of  are  so 
numerous,  their  character  so  various,  and  the  laws  of 
their  sequence  so  obscure,  that  it  would  seem  scarcely 
possible  to  ascertain  them  all,  much  less  to  assign  to  each 
its  exact  value.  And  even  if  this  were  possible,  the  task 
of  tracing  these  principles  to  their  consequences,  allowing 
to  each  its  due  significance,  and  no  more  than  its  due 
significance,  would  present  a  problem  so  complex  and 
difficult  as  to  defy  the  powers  of  the  most  accomplished 
reasoners. 

But  although  this  is  so,  and  although,  therefore,  neither 
Political  Economy  nor  any  of  the  class  of  inquiries  to 


56 


THE   CHARACTER    OF 


which  it  belongs  may  ever  be  expected  to  reach  that 
perfection  which  has  been  attained  in  some  of  the  more 
advanced  physical  sciences,  yet  this  does  not  forbid  us  to 
hope  that,  by  following  in  our  economic  investigations 
the  same  course  which  lias  been  pursued  with  such  suc 
cess  in  physical  science,  we  may  attain,  if  not  to  absolute 
scientific  perfection,  at  least  to  the  discovery  of  solid  and 
valuable  results. 

I/  The  desires,  passions,  and  propensities  which  influence 
mankind  in  the  pursuit  of  wealth  are,  as  I  have  inti 
mated,  almost  infinite ;  yet  among  these  there  are  some 
principles  of  so  marked  and  paramount  a  character  as 
both  to  admit  of  being  ascertained,  and,  when  ascertained, 
to  afford  the  data  for  determining  the  most  important 
laws  of  the  production  and  distribution  of  wealth,  in  so 
far  as  these  laws  are  affected  by  mental  causes.  To  pos 
sess  himself  of  these  is  the  first  business  of  the  political 
economist ;  he  has  then  to  take  account  of  some  leading 
physiological  facts  connected  with  human  nature;  and, 
lastly,  to  ascertain  the  principal  physical  characteristics 
of  those  natural  agents  of  production  on  which  human 
industry  is  exercised.  Thus  he  will  consider,  as  being 
included  among  the  paramount  mental  principles  to 
which  I  have  alluded,  the  general  desire  for  physical 
well-being,  and  for  wealth  as  the  means  of  obtaining  it; 
the  intellectual  power  of  judging  of  the  efficacy  of  means 
to  an  end,  along  with  the  inclination  to  reach  our  ends 
by  the  easiest  and  shortest  means — mental  facts  from 
which  results  the  desire  to  obtain  wealth  at  the  least  pos 
sible  sacrifice  ;  he  will  further  duly  weigh  those  propen 
sities  which,  in  conjunction  with  the  physiological  con 
ditions  of  the  human  frame,  determine  the  laws  of  popu- 


POLITICAL   ECONOMY.  57 

lation  ;  and,  lastly,  he  will  take  into  account  the  physical 
qualities  of  the  soil,  and  of  those  other  natural  agents  on 
which  the  labor  and  ingenuity  of  man  are  employed/' 
These  facts,  whether  mental  or  physical,  he  will  con 
sider,  as  I  have  already  stated,  not  with  a  view  to  explain 
them,  bat  as  the  data  of  his  reasoning,  as  leading  causes 
affecting  the  production  and  distribution  of  wealth. 

But  it  must  not  be  thought  that,  when  these  cardinal 
facts  have  been  ascertained  and  their  consequences  duly 
developed,  the  labors  of  the  political  economist  are  at  an 
end,  even  supposing  that  his  treatment  of  them  has  been 
exhaustive  and  his  reasoning  without  a  flaw.  Though 
the  conclusions  thus  arrived  at  will,  in  the  main,  corre 
spond  with  the  actual  course  of  events,  yet  great  and 
glaring  discrepancies  will  frequently  occur.  The  data 
on  which  his  speculations  have  been  based  include,  in 
deed,  the  grand  and  leading  causes  which  regulate  the 
production  and  distribution  of  wealth,  but  they  do  not 
include  all  the  causes.  Many  subordinate  influences 
(subordinate,  I  mean,  in  relation  to  the  ends  of  Political 
Economy)  will  intervene  to  disturb,  and  occasionally  to 
reverse,  the  operation  of  the  more  powerful  principles, 
and  thus  to  modify  the  resulting  phenomena.  The  next 
step,  therefore,  in  his  investigations  will  be  to  endeavor 
as  far  as  possible  to  ascertain  the  character  of  those  sub 
ordinate  causes,  whether  physical  or  mental,  political  or 
social,  which  influence  human  conduct  in  the  pursuit  of 
wealth ;  and  these,  when  he  has  found  them  and  is  en 
abled  to  appreciate  them  with  sufficient  accuracy,  he  will 
incorporate  among  the  premises  of  the  science,  as  data 
to  be  taken  account  of  in  his  future  speculations. 

Thus  the  political  and  social  institutions  of  a  coun- 
C2 


£g  THE  CHARACTER   OF 

try,  and  in  particular  the  laws  affecting  tlie  tenure  of 
land,  will  be  included  among  such,  subordinate  agen 
cies  ;  and  it  will  be  for  the  political  economist  to  show 
in  what  way  causes  of  this  kind  modify  the  operation 
of  more  fundamental  principles  in  relation  to  the  phe 
nomena  which  it  belongs  to  his  science  to  investigate. 

Again,  any  great  discovery  in  the  arts  of  production, 
such,  e.  g.,  as '  the  steam-engine,  will  be  a  new  fact  for 
the  consideration  of  the  political  economist ;  it  will  be 
for  him  to  consider  its  effect  on  the  productiveness  of 
industry  or  the  distribution  of  its  products  ;  how  far 
and  in  what  directions  it  is  calculated  to  affect  wages, 
profits,  and  rent,  and  to  modify  those  conclusions  to 
which  he  may  have  been  led  by  reasoning  from  the 
state  of  productive  industry  previous  to  its  introduc 
tion.  It  will  be  like  the  discovery  to  an  astronomer 
of  a  new  planet,  the  attraction  of  which,  operating  on 
all  the  heavenly  bodies  within  the  sphere  of  its  influ 
ence,  will  cause  them  more  or  less  to  deviate  from  the 
path  which  had  been  previously  calculated  for  them. 
It  is  a  new  force,  which,  in  speculating  on  the  tenden 
cies  of  economic  phenomena,  the  political  economist  will 
include  as  a  new  datum  among  his  premises. 

In  the  same  way,  also,  those  motives  and  principles 
of  action  which  may  be  developed  in  the  progress  of 
society — so  far  as  they  may  be  found  to  affect  the  phe 
nomena  of  wealth — will  also  be  taken  account  of  by 
the  political  economist.  He  will  consider,  e.  g.,  the  in 
fluence  of  custom  in  modifying  human  conduct  in  the 
pursuit  of  wealth ;  he  will  consider  how,  as  civilization 
advances,  the  estimation  of  the  future  in  relation  to 
the  present  is  enhanced,  and  the  desire  for  immediate 


POLITICAL  ECONOMY.  59 

enjoyment  is  controlled  by  the  increasing  efficacy  of 
prudential  restraint ;  lie  will  also  observe  how  ideas  of 
decency,  comfort,  and  luxury  are  developed  as  society 
progresses,  modify  ing  the  natural  force  of  the  princi 
ples  of  population,  influencing  the  mode  of  expendi 
ture  of  different  classes,  and  affecting  thereby  the  dis 
tribution  of  industrial  products. 

The  question  is  sometimes  asked — How  far  should 
moral  and  religious  considerations  be  admitted  as  com 
ing  within  the  purview  of  Political  Economy  ? l  and 
the  doctrine  now  under  exposition  enables  us  to  supply 
the  answer.  Moral  and  religious  considerations  are  to 
be  taken  account  of  by  the  economist  precisely  in  so 
far  as  they  are  found,  in  fact,  to  affect  the  conduct  of 
men  in  the  pursuit  of  wealth.  In  so  far  as  they  oper 
ate  in  this  way,  such  considerations  are  as  pertinent  to 
his  inquiries  as  the  desire  for  physical  well-being,  or 
the  propensity  in  human  beings  to  reproduce  their 
kind ;  and  they  are  only  less  important  as  premises  of 
his  science  than  the  latter  principles,  because  they  are 
far  less  influential  with  regard  to  the  phenomena  which 
constitute  the  subject-matter  of  his  inquiries. 

As  I  have  already  remarked,  it  is  scarcely  possible 
that  all  these  circumstances  should  be  ascertained  or 
accurately  appreciated  ;  but  it  seems  quite  possible  that 
some  of  the  most  important  of  them  may,  with  suffi 
cient  accuracy  at  least  to  be  made  available  as  data  for 
subsequent  deductions,  and  be  entitled  to  a  place  among 
the  premises  of  the  science.  And  in  proportion  as  this 

1  To  be  distinguished  from  another  question  with  which  it  is  com 
monly  confounded,  viz.,  How  far  should  economic  considerations  be  made 
subordinate  to  considerations  of  morality  in  the  art  of  government  ? 


60 


THE    CHARACTER    OF 


is  done,  in  proportion  to  the  completeness  of  its  prem 
ises,  and  to  the  skill  with  which  they  are  reasoned  upon, 
will  the  science  of  Political  Economy  approximate  to 
ward  that  perfection  which  has  been  attained  in  other 
branches  of  knowledge ;  in  the  same  degree  will  its  con 
clusions  correspond  with  actual  events,  and  its  doctrines 
become  safe  and  trustworthy  guides  to  the  practical 
statesman  and  the  philanthropist. 

§  3.  Having  now  considered  the  character  and  limits 
of  Political  Economy,  I  shall  conclude  this  lecture  by 
adverting  briefly  to  a  point — not,  as  might  at  first  sight 
seem,  of  purely  theoretic  importance — on  which  some 
high  authorities  are  at  variance.  I  allude  to  the  ques 
tion  whether  Political  Economy  be  a  positive  or  a  hy 
pothetical  science. 

It  does  not  appear  that  the  meaning  of  the  terms 
"  positive  "  and  "  hypothetical,"  as  they  have  been  used 
in  this  controversy,  has  been  precisely  fixed,  and  I  am 
disposed  to  think  that  the  difference  of  opinion  which 
prevails  may,  in  a  great  measure,  be  resolved  into  an 
ambiguity  of  language.  Let  us  consider,  then,  what  is 
to  be  understood  by  the  terms  " positive"  and  "hypo 
thetical  "  when  applied  to  a  science. 

In  the  first  place,  we  may  describe  a  science  as  "  pos 
itive  "  or  "  hypothetical "  with  reference  to  the  character 
of  its  premises.  It  is  in  this  sense  that  we  speak  of 
Mathematics  as  a  hypothetical  science, its  premises  being 
arbitrary  conceptions  framed  by  the  mind,  which  have 
nothing  corresponding  to  them  in  the  world  of  real  ex 
istence  ;  and  it  is  in  this  sense  that  we  distinguish  it 
from  the  positive  physical  sciences,  the  premises  of 


POLITICAL  ECONOMY.  61 

which  are  laid  in  the  existing  facts  of  nature.      But 

O 

"positive"  and  "hypothetical"  may  also  be  used  with 
reference  to  the  conclusions  of  a  science ;  and  in  this 
sense  all  the  physical  sciences  which  have  advanced  so 
far  as  to  admit  of  deductive  reasoning  must  be  consid 
ered  hypothetical,  in  contradistinction  to  those  less  ad 
vanced  sciences  which,  being  still  in  the  purely  induc 
tive  stage,  express  in  their  conclusions  merely  observed 
and  generalized  facts.  The  conclusions,  e.  g.,  of  a  mech 
anician  or  of  an  astronomer,  though  correctly  deduced 
from  premises  representing  concrete  realities,  may  have 
nothing  accurately  to  correspond  with  them  in  nature. 
The  mechanician  may  have  overlooked  the  disturbing 
influence  of  friction.  The  astronomer  may  have  been 
ignorant  of  the  existence  of  some  planet,  the  attractive 
force  of  which  may  be  an  essential  element  in  the  so 
lution  of  his  problem.  The  conclusions  of  each,  there 
fore,  when  applied  to  facts,  can  only  be  said  to  be  true 
in  the  absence  of  disturbing  causes  /  which  is,  in  other 
words,  to  say  that  they  are  true  on  the  hypothesis  that 
the  premises  include  all  the  causes  affecting  the  result. 
The  correspondence  of  such  deductions  wTith  facts  may, 
according  to  the  circumstances  of  each  case,  possess  any 
degree  of  probability,  from  a  mere  presumption  in  favor 
of  a  particular  result  to  a  probability  scarcely  distin 
guishable  from  absolute  certainty.  This  will  depend 
on  the  degree  of  perfection  which  the  science  has  at 
tained  ;  but,  whatever  be  that  degree  of  perfection, 
from  the  limited  nature  of  man's  faculties  he  can  never 
be  sure  that  he  is  in  possession  of  all  the  premises  af 
fecting  .the  result,  and  therefore  can  never  be  certain 
that  his  conclusions  represent  positive  realities.  Speak- 


£2  THE  CHARACTER   OF 

ing,  therefore,  with  reference  to  the  conclusions  of  those 
physical  sciences  in  which  deductive  reasoning  is  em 
ployed,  such  sciences  must  be  regarded  as  hypothetical. 

On  the  other  hand,  in  those  sciences  which  have  not 
advanced  far  enough  to  admit  of  deductive  reasoning, 
such  laws  as  they  have  arrived  at,  being  mere  general 
ized  statements  of  observed  phenomena,  represent  not 
hypothetical  but  positive  truth.  Such  are  the  general 
ized  facts  in  geology  and  in  many  of  the  natural  sci 
ences. 

Now  Political  Economy  seems  in  this  respect  plainly 
to  belong  to  the  same  class  of  sciences  with  Mechanics, 
Astronomy,  Optics,  Chemistry,  Electricity,  and,  in  gen 
eral,  all  those  physical  sciences  which  have  reached  the 
deductive  stage.  Its  premises  are  not  arbitrary  figments 
of  the  mind,  formed  without  reference  to  concrete  ex 
istences,  like  those  of  Mathematics ;  nor  are  its  conclu 
sions  mere  generalized  statements  of  observed  facts, 
like  those  of  the  purely  inductive  natural  sciences.  But, 
like  Mechanics  or  Astronomy,  its  premises  represent  pos 
itive  facts  ;  while  its  conclusions,  like  the  conclusions 
of  these  sciences,  may  or  may  not  correspond  to  the 
realities  of  external  nature,  and  therefore  must  be  con 
sidered  as  representing  only  hypothetical  truth. 

It  is  positively  true,  e.  g.,  to  assert  that  men  desire 
wealth,  that  they  seek,  according  to  their  lights,  the  eas 
iest  and  shortest  means  by  which  to  attain  their  ends, 
and  that  consequently  they  desire  to  obtain  wealth  with 
the  least  exertion  of  labor  possible ;  and  it  is  a  logical 
deduction  from  this  principle  that,  where  perfect  liberty 
of  action  is  permitted,  laborers  will  seek  those  employ 
ments,  and  capitalists  those  modes  of  investing  their 


POLITICAL   ECOXOMY.  £3 

v>J*^ 

capital,  in  which,  ceteris  paribus,  wages  and  profits  are 
highest.  It  is  farther  a  necessary  consequence  of  this 
principle  that,  were  it  universally  and  constantly  acted 
upon,  the  rate  of  profit  and  the  rate  of  wages  over  the 
whole  world  would  not  indeed  be  the  same,  but  would 
stand,  or  tend  to  stand,  in  the  same  relation  to  the  act 
ual  sacrifices  undergone  by  the  recipients  of  these  two 
kinds  of  remuneration.  Yet  so  far  is  this  from  being 
the  case  that  there  are  scarcely  two  countries  in  which 
wages  and  profits  (meaning  thereby  the  average  rate  of 
each)  are  not  permanently  different.  The  French  la 
borer  will  content  himself  with  the  rate  of  wages  which 
prevails  in  France,  rather  than  cross  the  Atlantic  for  a 
double  remuneration.  The  English  capitalist  will  pre--? 
fer  eight  or  ten  per  cent,  profit  with  English  society 
to  the  quadruple  returns  of  California  or  Australia,  j 
The  same  inequality  which  we  find  in  the  average  rates 
of  wages  and  profits  prevailing  in  different  countries  we 
find  also  in  a  less  degree  in  the  different  departments  of 
productive  industry  in  the  same  country.  What  in  the 
former  case  is  done  by  the  love  of  country  to  control 
the  simple  desire  for  wealth  and  aversion  to  labor,  and 
to  modify  the  resulting  phenomena,  is  done  in  the  latter 
by  the  ignorance  and  poverty  of  large  classes  which  dis 
able  them  for  competing  for  the  more  lucrative  employ 
ments,  and  by  opinions  and  prejudices  respecting  the  de 
gree  of  credit  or  respectability  attaching  to  particular 
trades  and  employments,  such  as  prevail  in  every  civil 
ized  community. 

It  is  evident,  therefore,  that  an  economist,  arguing 
from  the  unquestionable  facts  of  man's  nature — the  de 
sire  of  wealth  and  the  aversion  to  labor — and  arguing 


(54:  THE  CHARACTER   OF 

with  strict  logical  accuracy,  may  yet,  if  lie  omit  to  no 
tice  other  principles  also  affecting  the  question,  be  land 
ed  in  conclusions  which  have  no  resemblance  to  exist 
ing  realities.  But  he  can  never  be  certain  that  he  does 
not  omit  some  essential  circumstance,  and,  indeed,  it  is 
scarcely  possible  to  include  all :  it  is  evident,  therefore, 
that,  as  is  the  case  in  those  deductive  physical  sciences 
to  which  I  have  alluded,  his  conclusions  will  correspond 
with,  facts  only  in  the  absence  of  disturbing  causes, 
which  is,  in  other  words,  to  say  that  they  represent  not 
positive  but  hypothetic  truth.1 

It  thus  appears  that  Political  Economy,  according  as 
we  consider  it  with  reference  to  its  premises  or  to  the 
doctrines  deduced  from  them,  must  be  regarded  in  the 
one  case  as  a  positive,  in  the  other  as  a  hypothetical  sci 
ence.  It  is,  however,  to  be  remarked  that  that  portion 
of  the  science  which  represents  positive  truth — its  prem- 

1  In  entire  accord  with  this  is  M.  A.  E.  Cherbtiliez  in  his  admirable 
"Pre'cis  de  la  Science  Economique  :" 

"  Qu'est-ce  qu'une  verite  scientifique  ?  C'est  1'expression  d'une  idee, 
ou  d'une  loi  generale,  a  laquelle  notre  intelligence  arrive  en  partant  de 
certaines  donnees  fournies  par  1'observation  immediate.  Nous  analysons 
un  certain  nombre  de  phenomenes  pour  en  tirer  ce  qu'ils  ont  de  commun ; 
puis  nous  raisonnons  d'apres  ces  resultats  de  1'analyse,  pour  construire 
une  theorie  scientifique.  Si  nous  avons  bien  observe',  si  notre  raisonne- 
ment  a  etc  correct,  la  consequence  est  aussi  vraie  que  la  donnee  generale 
d'ou  elle  decoule,  mais  elle  ne  peut  1'etre  davantage,  ni  d'une  autre  ma- 
niere.  Or,  la  donnee  generale  n'est  pas  une  realite  ;  elle  n'est  qu'une  ab 
straction,  au  moins  dans  la  plupart  des  cas.  Pour  1'obtenir,  qu'avons- 
nous  fait  ?  Nous  avons  depouille  les  phenomenes  reels  de  ce  qui  les 
rendait  complexes  et  divers,  pour  ne  voir  que  ce  qu'ils  avaient  de  com 
mun.  Le  resultat  de  cette  analyse  peut  done  fort  bien  ne  repre'senter 
rien  de  reel,  ne  ressembler  exactement  a  aucun  des  phe'nomenes  com 
plexes  tie  la  realite.  Des  lors,  la  theorie  la  loi,  que  nous  construisons 
d'apres  ce  re'sultat,  peut  aussi  ne  se  verifier  dans  aucun  des  faits  que  nous 
verrons  s'accomplir  sous  nos  yeux.  Cette  theorie,  cette  loi  n'en  sera  pas 
moins  une  verite  scientifique." — Tome  I.  pp.  10,  1 1. 


POLITICAL   ECONOMY.  65 

ises,  namely,  or  the  facts,  mental  and  physical,  upon 
which  it  rests  —  belongs  to  it  in  common  with  many 
other  sciences  and  arts.  All  that  is  properly  speaking 
Political  Economy  is  that  system  of  doctrines  which 
has  heen  or  may  be  deduced  from  those  premises ;  and 
all  this  represents,  as  I  have  shown,  hypothetical  truth. 
It  appears  to  me,  therefore,  clearly  proper  that  Polit 
ical  Economy  should  be  classed  as  a  hypothetical  sci 
ence. 

But  in  thus  describing  Political  Economy,  I  have  vent 
ured  to  dissent  from  the  high  authority  of  Mr.  Senior. 
I  shall,  therefore,  read  you  the  passage  in  which  he  ex 
presses  his  objections  to  regarding  Political  Economy  as 
a  hypothetical  science : 

"The  hypothetical  treatment  of  the  science  appears  to 
me  to  be  open  to  three  great  objections.  In  the  first  place, 
it  is  obviously  unattractive.  No  one  listens  to  an  exposi 
tion  of  what  might  be  the  state  of  things  under  given  but 
unreal  conditions  with  the  interest  with  which  he  hears  a 
statement  of  what  is  actually  taking  place. 

"In  the  second  place,  a  writer  who  starts  from  arbitra 
rily  assumed  premises  is  in  danger  of  forgetting  from  time 
to  time  their  unsubstantial  foundation,  and  of  arguing  as 
if  they  were  true.  This  has  been  the  source  of  much  error 
in  Ricardo.  lie  assumed  the  land  of  every  country  to  be 
of  different  degrees  of  fertility,  and  rent  to  be  the  value 
of  the  difference  between  the  fertility  of  the  best  and  of 
the  worst  land  in  cultivation.  The  remainder  of  the  prod 
uce  he  divided  into  profit  and  wages.  He  assumed  that 
wages  naturally  amount  to  neither  more  nor  less  than  the 
amount  of  commodities  which  nature  or  habit  has  ren 
dered  necessary  to  maintain  the  laborer  and  his  family  in 
health  and  strength.  He  assumed  that,  in  the  progress  of 
population  and  wealth,  worse  and  worse  soils  are  constant 
ly  resorted  to,  and  that  agricultural  labor,  therefore,  be- 


QQ  THE    CHARACTER   OF 

comes  less  and  less  proportionately  productive;  and  he 
inferred  that  the  share  of  the  produce  of  land  taken  by 
the  landlord  and  by  the  laborer  must  necessarily  in 
crease,  and  the  share  taken  by  the  capitalist  constantly 
diminish. 

"  This  is  a  logical  inference,  and  would  consequently  have 
been  true  in  fact,  if  the  assumed  premises  had  been  true. 
The  fact  is,  however,  that  almost  every  one  of  them  is 
false.  It  is  not  true  that  rent  depends  on  the  difference  in 
fertility  of  the  different  portions  of  land  in  cultivation. 
It  might  exist  if  the  whole  territory  of  a  country  were  of 
uniform  quality.  It  is  not  true  that  the  laborer  always  re 
ceives  precisely  the  necessaries,  or  even  what  custom  leads 
him  to  consider  the  necessaries  of  life.  In  civilized  coun 
tries  he  almost  always  receives  much  more ;  in  barbarous 
countries  he  from  time  to  time  obtains  less.  It  is  not  true 
that,  as  wealth  anc\  population  advance,  agricultural  labor 
becomes  less  and  less  proportionately  productive.  .  .  .  Mr. 
Ricardo  was  certainly  justified  in  assuming  his  premises, 
provided  that  he  was  always  aware,  and  always  kept  in 
mind,  that  they  were  merely  assumed.  This,  however,  he 
seems  sometimes  not  to  know,  and  sometimes  he  forgets. 
Thus  he  states,  as  an  actual  fact,  that  in  an  improving 
country  the  difficulty  of  obtaining  raw  produce  constantly 
increases.  He  states  as  a  real  fact  that  a  tax  on  wao;es 

O 

falls  not  on  the  laborer,  but  on  the  capitalist.  .  .  . 

"A  third  objection  to  reasoning  on  hypothesis  is  its  lia 
bility  to  error,  either  from  illogical  inference  or  from  the 
omission  of  some  element  necessarily  incident  to  the  sup 
posed  case.  When  a  writer  takes  his  premises  from  obser 
vation  and  consciousness,  and  infers  from  them  what  he 
upposes  to  be  real  facts,  if  hejiave  committed  any  grave 
error,  it  generally  leads  him  to  some  startling  conclusion. 
He  is  thus  warned  of  the  probable  existence  of  an  un 
founded  premise  or  of  an  illogical  inference,  and,  if  he  be 
wise,  tries  back  until  he  has  detected  his  mistake.  But 
the  strangeness  of  the  results  of  an  hypothesis  gives  no 
warning.  We  expect  them  to  differ  from  what  we  ob- 


POLITICAL  ECONOMY.  C7 

servo,  and  lose,  therefore,  this  incidental  means  of  testing 
the  correctness  of  our  reasoning." 1 

With  regard  to  the  criticisms  on  Ricardo,  I  may  per 
haps  have  an  opportunity  of  adverting  to  them  on  some 
future  occasion.  I  shall  merely  at  present  say  that  they 
appear  to  me  to  be  unfounded.  But  what  I  am  more 
immediately  concerned  in  remarking  is  that  the  objec 
tions  of  Mr.  Senior  to  the  hypothetical  treatment  of  Po 
litical  Economy,  so  far  as  they  possess  weight,  do  not 
apply  to  this  mode  of  treatment  as  I  have  just  described 
it.  According  to  that  description,  Political  Economy 
has  been  represented  as  deriving  its  premises  from  ex 
isting  facts ;  it  was  to  the  inferences  drawn  from  these 
premises  only  that  the  term  "  hypothetical "  was  applied ; 
but  as  these  inferences  constituted  the  whole  of  what  is 
properly  called  Political  Economy,  I  conceived  that  Po 
litical  Economy  was  properly  designated  as  an  hypo 
thetical  science.  But  it  is  to  the  character,  not  of  the 
conclusions,  but  of  the  premises,  that  Mr.  Senior's  ob 
jections  apply.  "  A  writer,"  he  says,  "  who  starts  from 
arbitrarily  assumed  premises  is  in  danger  of  forgetting 
their  unsubstantial  foundation."  "  K"o  one  listens  to  an 
exposition  of  what  might  be  the  state  of  things  under 
given  but  unreal  conditions  with  the  interest  with  which 
he  hears  a  statement  of  what  is  actually  taking  place." 
"  The  strangeness  of  the  results  of  an  hypothesis  gives 
no  warning."  It  is  evident  that  these  are  no  objections 
to  a  system  of  doctrines  which  is  founded,  not  on  an 
hypothesis,  but  on  facts. 

Mr.  Senior's  language,  indeed,  would  seem  to  imply 
that,  if  the  premises  have  a  foundation  in  existing  facts, 

1  "Introductory  Lecture  on  Political  Economy,"  ]852,  p.  63. 


£g  THE   CHARACTER   OF 

the  conclusions  logically  deduced  from  them  must  rep 
resent  actual  phenomena.  Speaking  of  Ricardo's  rea 
soning,  he  says,  "  This  was  a  logical  inference,  and  would 
consequent^},  have  been  true  in  fact,  if  the  assumed  prem 
ises  had  been  true."  But  it  is  surely  possible  that  the 
premises  should  be  true,  and  yet  incomplete  —  true  so 
far  as  the  facts  which  they  assert  go,  and  yet  not  includ 
ing  all  the  conditions  which  affect  the  actual  course  of 

o 

events.  The  laws  of  motion  and  of  gravity  are  not  arbi 
trary  assumptions,  but  have  a  real  foundation  in  nature ; 
and  it  is  a  strictly  logical  deduction  from  those  laws  that 
the  patli  of  a  projectile  is  in  the  course  of  a  parabola ; 
yet,  in  point  of  fact,  no  projectile  accurately  describes 
this  course ;  the  friction  of  the  air,  which  was  not  in 
cluded  in  the  premises,  coming  in  to  disturb  the  opera 
tion  of  the  other  principles.  In  the  same  way  (as  I  have 
already  shown  by  several  illustrations,  and  as  will  appear 
more  fully  hereafter)  the  doctrines  of  Political  Econo 
my,  though  based  upon  indubitable  facts  of  human  nature 
and  of  the  external  world,  do  not  necessarily  represent, 
and  scarcely  ever  precisely  represent,  existing  occur 
rences.  Indeed,  Mr.  Senior  in  another  passage  fully 
admits  this.  "  We  shall  not,"  he  says,  "  it  is  true,  from 
the  fact  that  by  acting  in  a  particular  manner  a  laborer 
may  obtain  higher  wages,  a  capitalist  larger  profits,  or  a 
landlord  higher  rent,  be  able  to  infer  the  further  fact 
that  they  will  certainly  act  in  this  manner;  but  we  shall 
be  able  to  infer  that  they  will  do  so  in  tlie  absence  of 
disturbing  causes"  This  concedes  the  only  point  for 
which  I  contend  —  the  point,  namely,  that  the  conclu 
sions  of  Political  Economy  do  not  necessarily  represent 
actual  events.  The  facts  thus  being  agreed  upon,  the 


POLITICAL  ECONOMY.  (59 

question  is  reduced  to  the  verbal  one,  viz.,  whether  a 
science,  the  doctrines  of  which  correspond  with  external 
realities  only  "in  the  absence  of  disturbing  causes,"  is 
properly  described  as  a  positive  or  hypothetical  science. 
It  appears  to  me  that  a  proposition  can  not  correctly  be 
said  to  represent  "  positive  truth "  which  corresponds 
with  facts  only  when  no  disturbing  causes  intervene — 
this  condition,  moreover,  being  one  which  is  scarcely 
ever  realized.  Kor  do  I  think  the  description  would  be 
less  objectionable,  even  though,  as  Mr.  Senior  afterward 
remarks,  it  were  " frequently "  possible  "to  state  the 
cases  in  which  these  causes  may  be  expected  to  exist, 
and  the  force  with  which  they  are  likely  to  operate." 
On  the  other  hand,  as  I  have  already  admitted,  if  the 
term  be  used,  not  with  reference  to  what  are  properly 
the  doctrines  of  Political  Economy,  but  to  the  grounds 
on  which  these  doctrines  are  built,  Political  Economy 
is  as  well  entitled  to  be  considered  a  "positive  science" 
as  any  of  those  physical  sciences  to  which  this  name  is 
commonly  applied. 

This  point,  however,  as  I  have  said,  is  a  purely  verbal 
one,  and  as  such  is  of  little  importance,  provided  the 
real  character  of  the  principles  in  question  be  borne  in 
mind.  This  character,  as  I  have  endeavored  to  estab 
lish,  is  identical  with  that  of  the  physical  principles 
which  are  deduced  from  the  laws  of  gravitation  and 
motion ;  like  these,  the  doctrines  of  Political  Economy 
are  to  be  understood  as  asserting,  not  what  will  take 
place,  but  what  ivould  or  what  tends  to  take  place,  and 
in  this  sense  only  are  they  true.1  If  this  admission  con- 

1  "  Ce  serait  avec  aussi  pen  de  fon clement  et  aussi  pen  de  succes  quo 
vous  attaqueriez  la  theorie  du  libre  cchange  en  alleguant  que  certains  pays 


Y0  THE   CHARACTER    OF 

stitute  an  objection  to  Political  Economy,1  it  is  equally 
an  objection  to  Astronomy,  Mechanics,  and  to  all  those 

ont  atteint,  sous  un  regime  de  restrictions  et  d'entraves,  un  tres-haut 
degre  de  prosperite,  tandis  que  d'autres  pays,  qui  jouissaient  d'une  liberte 
de  commerce  comparativement  fort  grande,  sont  restes  en  arriere  des  pre 
miers  dans  leur  de'veloppement  economique.  On  vous  repondrait  que  la 
prospe'rite'  economique  est  le  res ul tat  complexe  de  plusieurs  causes,  parmi 
lesquelles  il  peut  y  en  avoir  de  plus  puissantes  que  la  liberte.  La  thcorie 
que  vous  attaquez  n'est  point  formulee  en  ces  termes,  que  le  developpement 
economique  des  societes  est  proportionnel  au  degre  de  liberte  dont  elles 
jouissent,  mais  dans  oeux-ci :  que  la  liberte  du  commerce  est  plus  favorable 
a  ce  developpement  que  les  entraves  et  les  restrictions,  ve'rite  centre  laquelle 
votre  objection  ne  saurait  avoir  aucune  force,  puisque  les  faits  allegues  ne 
lid  sont  nullement  contraires.  Ces  faits  prouvent  seulement  que  le 
developpement  economique  est  un  phenomene  complexe,  et  que,  cliez 
les  nations  signalees  par  vous  comme  fournissant  une  prcuve  de  1'ineffi- 
cacite  du  libre  echange,  Faction  de  ce  principe  a  ete  neutralised  par 
d'autres  causes,  telle  que  la  situation  geographique,  ou  1'inse'curite 
re'sultant  de  mauvaises  lois,  quj^ont  agi  en  sens  oppose." — Precis  de  la 
Science  Economique,  Tome  I.  pp.  13,  li. 

1  Mr.  Jennings  ("Natural  Elements  of  Political  Economy,"  p.  4)  dis 
poses  of  this  defense  of  economic  doctrine  in  the  following  fashion : 
"The  doubting  pupil  is  now  dismissed  with  the  assurance  that  the  prin 
ciples  of  Political  Economy  which  he  has  been  taught,  if  not  true,  have 
a  tendency  to  be  true  ;  that  if  found  imperfect  in  the  abstract  (quwre,  con 
crete  ?),  they  are  perfect  in  the  concrete  (quccre,  abstract  ?) ;  and  that  an 
allowance  must  always  be  made  for  the  influence  of  disturbing  causes." 

I  don't  know  that  any  further  reply  need  be  made  to  this  than  that 
given  in  the  text,  namely,  that  whatever  be  the  value  of  the  objection,  it 
applies  with  equal  force  to  all  sciences  whatever  which  have  reached  the 
deductive  stage.  In  no  other  sense  is  a  dynamical  law  true  than  as  ex 
pressing  "  a  tendency  "  influencing  matter.  Whether  the  result  in  any 
given  case  be  such  as  the  law  asserts  will  depend,  whatever  be  the  branch 
of  speculation,  upon  whether  the  necessary  cet eris paribus,  implied  in  its 
statement,  is  realized.  The  reason  that  attention  has  been  drawn  more 
to  the  influence  of  disturbing  causes  in  the  political  and  moral  than  in  the 
physical  sciences  is  sufficiently  obvious.  In  those  physical  sciences  which 
are  sciences  of  observation,  as  Astronomy,  the  principles  are  few  in  num 
ber  and  perfectly  definite  in  character ;  while  in  those  physical  sciences, 
as,  e.  g.,  Chemistry,  in  which  the  principles  are  more  numerous  and  com 
plex,  we  can  avail  ourselves  of  experiment.  In  the  former  case  all,  or 
nearly  all,  the  causes  influencing  the  result  are  knowrn,  and  their  effect 
may  be  calculated;  in  the  latter,  all  that  are  not  required  may  be  elimi- 


POLITICAL   ECOXOMY.  71 

physical  sciences  which  combine  deductive  with  induc 
tive  reasoning.1 

And  now  I  am  in  a  position  to  attempt  a  definition 
of  Political  Economy,  which  I  would  define  in  either  of 
the  following  forms  :  As  the  science  which,  accepting  as 
ultimate  facts  the  principles  of  human  nature  and  the 
physical  laws  of  the  external  world,  as  well  as  the  con 
ditions,  political  and  social,  of  the  several  communities 
of  men,  investigates  the  laws  of  the  production  and  dis 
tribution  of  wealth  which  result  from  their  combined  op 
eration  ;  or  thus :  As  the  science  which  traces  the  phe 
nomena  of  the  production  and  distribution  of  wealth  up 
to  their  causes,  in  the  principles  of  human  nature  and 
the  laws  and  events — physical,  political,  and  social — of 
the  external  world. 


nated.  But  in  the  moral  and  political  sciences,  in  which  we  have  to  deal 
with  human  interests  and  passions,  the  agencies  in  operation  at  any  given 
time  in  any  given  society  are  numerous,  while,  being  in  this  case  pre 
cluded  from  experiment,  we  are  unable  to  prepare  the  conditions  before 
hand  with  a  view  to  preserving  the  necessary  ceteris  par  i  bus. 
1  See  Mill's  "System  of  Logic,"  book  iii.  chap.  x.  §  5. 


LECTURE  III. 

OF  THE  LOGICAL  METHOD  OF  POLITICAL  ECONOMY. 

§  1.  IN  adverting  in  the  opening  of  this  course  to  the 
differences  of  opinion  now  existing  respecting  many  fun 
damental  principles  in  Political  Economy,  I  stated  that 
these  discrepancies  appeared  to  me  to  be  chiefly  trace 
able  to  the  more  loose  and  popular  method  of  treating 
economic  questions  which  has  of  late  years  come  into 
fashion ;  and  I  further  stated  that  this  change  in  the/ 
character  of  economic  discussions  was,  as  I  conceived, 
mainly  attributable  to  the  practical  success  of  econom 
ic  principles  in  the  experiment  of  free  trade — a  success 
which,  while  it  attracted  a  new  class  of  adherents  to 
the  cause  of  Political  Economy,  furnished  its  advocates 
also  with  a  new  description  of  arguments. 

The  method  which  we  pursue  in  any  inquiry  must  be 
determined  by  the  nature  and  objects  of  that  inquiry.  I 
was  thus  led  in  my  opening  lectures  to  consider  the  nat 
ure  and  objects  of  Political  Economy.  In  the  present 
and  following  lectures  I  proceed  to  discuss  the  method 
which,  having  regard  to  what  Political  Economy  proposes 
to  accomplish,  it  is  proper  to  pursue  in  its  investigations. 

Let  me  recall  briefly  the  description  I  have  given  of 
the  nature  and  objects  of  Political  Economy.  You  will 
remember  I  defined  Political  Economy  as  the  science 
which  investigates  the  laws  of  the  production  and  dis- 


POLITICAL   ECONOMY.  73 

tribtition  of  wealth,  which  result  from  the  principles  ofj 
human  nature  as  they  operate  under  the  actual  circumJ 
stances  of  the  external  world.     I  also  stated  that  those} 
mental  principles  and  physical  conditions  are  taken  by 
the  political  economist  as  ultimate  facts,  as  the  prem 
ises  of  his  reasonings,  beyond  which  he  is  not  concerned 
to  trace  the  causes  of  the  phenomena  of  wealth.    I  next 
considered  the  nature  of  those  ultimate  facts,  physical! 
and  mental,  and  found  that,  although  so  numerous  as  to  \ 
defy  distinct  specification,  there  are  yet  some,  the  exist 
ence  and  character  of  which  are  easily  ascertainable,  of 
such  paramount  importance  in  relation  to  the  production 
and  distribution  of  wealth  as   to   afford  a  sound  and 
stable  basis  for  deducing  the  laws  of  those  phenomena. 
The  principal  of  these  I  stated  to  be,  first,  the  desire  for 
physical  well-being  implanted  in  man,  and  for  wealth  as  ' 
the  means  of  obtaining  it,  and,  as  a  consequence  of  this  j 
in  conjunction  with  other  mental  attributes,  the  desire  \ 
to  obtain  wealth  at  the  least  possible  sacrifice;  second 
ly,  the  principles  of  population  as  derived  from  the  phys 
iological  character  of  man  and  his  mental  propensities ;   < 
and,  thirdly,  the  physical  qualities  of  the  natural  agents,   | 
more  especially  land,  on  which  human  industry  is  exer 
cised.     I  also  showed  you  that  the  most  important  of 
the  subordinate  principles  and  facts  affecting  the  pro 
duction  and  distribution  of  wealth,  which  come  in  to 
modify  and  sometimes  to  reverse  the  operation  of  the 
more  cardinal  principles,  are  also  capable  of  being  as 
certained  and  appreciated,  with  sufficient  accuracy  at 
least  to  be  taken  account  of  in  our  reasonings,  if  not  to 

O     7 

be  constituted  as  premises  of  the  science ;  and  of  these 
also  I  gave  several  examples. 

D 


74  THE  LOGICAL    METHOD   OF 

This,  then,  being  the  character  of  Political  Economy, 
we  have  to  consider  by  what  means  the  end  which  it 
proposes — the  discovery  of  the  laws  of  the  production 
and  distribution  of  wealth — may  be  most  effectually  pro 
moted.  To  the  question  here  indicated,  the  answer  most 
commonly  given  by  those  who  take  an  interest  in  econom 
ic  speculation  is — by  the  inductive  method  of  inquiry; 
'but  this,  without  more  explanation  than  is  usually  given, 
affords  us  little  practical  help.  For  what  are  we  to  un 
derstand  by  the  inductive  method?  What  are  the  logic 
al  processes  intended  to  be  included  under  this  form  of 
words  ?  That  is  a  question  to  which  not  many  of  those 
who  talk  of  studying  Political  Economy  "inductively" 
have  troubled  themselves  to  find  an  answer.  The  truth 
is,  the  expression  "inductive  method"  is  one  used  with 
much  latitude  of  meaning  even  by  writers  on  inductive 
logic — latitude  of  meaning  which  it  will  be  very  neces 
sary,  before  determining  whether  induction  be  applicable 
or  inapplicable  to  economic  investigation,  to  clear  up. 
In  its  more  restricted  and,  as  I  conceive,  its  proper  sense, 
induction  is  thus  defined  by  Mr.  Mill :  "  That  operation! 
of  the  mind  by  which  we  infer  that  what  we  know  to] 
be  true  in  a  particular  case  or  cases  will  be  true  in  alJ 
cases  which  resemble  the  former  in  certain  assignablcj 
respects.  In  other  words,  induction  is  the  process  b$ 
which  we  conclude  that  what  is  true  of  certain  individ 
uals  of  a  class  is  true  of  the  whole  class,  or  that  what  i3 
'true  at  certain  times  will  be  true  in  similar  circumstan] 
ces  at  all  times."1  The  characteristic  of  induction,  a^ 
thus  defined,  is  that  it  involves  an  ascent  from  particu- 

1  "System  of  Logic,"  book  iii.  chap.'ii.  §  1. 


POLITICAL   ECONOMY.  75 

lars  to  generals,  from  individual  facts  to  laws.  But  the 
word  is  frequently  used,  and  by  writers  of  authority,  in 
a  sense  much  wider  than  this.  For  example,  in  his  His 
tory  of  the  Inductive  Sciences,  Dr. Whewell  invariably 
speaks  of  laws  of  nature,  both  ultimate  and  secondary,  as 
being  established  by  induction,  and  as  being  "  induc 
tions;"  though  from  his  own  account  of  their  discovery 
it  is  evident  that  this  has  frequently  been  accomplished 
quite  as  much  by  reasoning  downward  from  general 
principles  as  by  reasoning  upward  from  particular  facts*-' 
Sir  John  Herschel,  too,  not  unfrequently  uses  the  term 
with  the  same  extended  meaning,  as  embracing  all  the 
local  processes  of  whatever  kind  by  which  the  truths 
of  physical  science  are  established.1  ^And  Mr.  Mill,  in 
speaking  of  the  inductive  logic,  describes  it  as  compris 
ing  not  merely  the  question,  "  how  to  ascertain  the  laws 
of  nature,"  but  also,  "  how,  after  having  ascertained 
them,  to  follow  them  to  their  results."  Such  being  the 
large  sense  in  which  " induction"  has  been  employed  by 
authoritative  writers,  it  is  obvious  that,  as  thus  under 
stood,  the  inductive  method  can  not  properly  be  contrast 
ed  with  the  "  deductive,"  since  it  includes  amonsr  its 

O 

processes  this  latter  mode  of  reasoning.  The  proper  an 
tithesis  to  induction,  in  this  wider  meaning  of  the  word, 
would  be,  not  deduction,  but  rather  that  method  of  spec 
ulation  which  is  known  as  the  "  metaphysical,"  in  obe 
dience  to  which  the  inquirer,  disdaining  to  be  guided 
by  experience,  aims  at  reaching  nature  by  transcending 
phenomena  through  the  aid  of  the  intuitions,  real  or  sup 
posed,  of  the  human  mind.  If  this  latter  mode  of  rea- 

1  "  Preliminary  Discourse  on  Natural  Philosophy." 


fjQ  THE  LOGICAL   METHOD    OF 

soiling  lias  ever  been  followed  in  economic  speculation, 
it  lias,  at  least,  been  long  laid  aside  by  all  writers  of  any 
mark  (with  the  possible  exception  of  Mr.  Buskin) ;  and 
therefore  the  question  really  at  issue,  as  regards  the  log 
ical  method  proper  to  Political  Economy,  is  not  as  to  the 
suitability  for  economic  investigation  of  the  inductive 
method  as  understood  by  such  writers  as  Herschel  and 
Whewell — this  we  may  take  as  generally  agreed  upon — 
but  the  more  specific  problem  as  to  the  suitability,  for 
the  purpose  in  hand,  of  the  several  processes  included 
tinder  that  comprehensive  sense  of  the  phrase ;  in  other 
words,  to  ascertain  the  place,  order,  and  importance  which 
induction  (in  the  narrower  meaning  of  the  term),  deduc 
tion,  verification,  observation,  and  experiment  ought  to 
hold  in  economic  inquiry. 

((The  question  being  reduced  to  this  issue,  the  answer 
of  not  a  few  people  would  still,  I  apprehend,  be  that 
induction  (in  the  narrower  sense,  as  distinguished  from 
deduction),  in  combination  with  observation  and  experi 
ment,  constitutes  the  true  path  of  economic  inquiry.  The 
student,  according  to  this  view,  ought  to  commence  by 
collecting  and  classifying  the  phenomena  of  wealth, 
prices,  wages,  rents,  profits,  exports,  imports,  increase  or 
decline  of  production, changes  in  modes  of  distribution: 
in  a  word,  as  far  as  they  admit  of  determination,  all  the 
facts  of  wealth  as  presented  in  actual  experience  in  dif 
ferent  countries ;  and,  having  done  so,  should  employ  the 
results  thus  obtained  as  data  by  which  to  rise,  by  direct 
or  indirect  inference,  to  the  causes  and  laws  which  gov 
ern  them.  ]Nrow,  to  perceive  the  utter  futility,  the  nec 
essary  impotence  of  such  a  method  of  proceeding  as  a 
means  of  solving  economic  problems,  one  has  only  to  con- 


POLITICAL  ECONOMY. 

sider  what  the  nature  of  those  problems  m-  The  phe 
nomena  of  wealth,  as  they  present  themselves  to  our  ob 
servation,  are  among  the  most  complicated  with  which 
speculative  inquiry  has  to  deal.  They  are  the  result  of 
a  great  variety  of  influences,  all  operating  simultaneously, 
reinforcing,  counteracting,  and  in  various  ways  modifying 
each  other.  Consider,  for  example,  the  number  of  in 
fluences  that  go  to  determine  so  simple  a  phenomenon 
as  the  selling  price  of  a  commodity — the  great  number 
and  variety  of  conditions  comprised  under  the  expression, 
"  the  demand  for  it,"  the  not  less  numerous  and  varied 
circumstances  on  which  the  "supply"  depends,  any  change 
in  any  of  which,  if  not  accompanied  by  a  compensating 
change  in  some  of  the  co-existing  conditions,  must  re 
sult  in  a  change  in  the  actual  phenomenon.  Kow,  when 
this  high  degree  of  complexity  characterizes  phenomena ; 
when  they  are  liable  to  be  influenced  by  a  multiplicity 
of  causes  all  in  action  at  the  same  time;  in  order  to  es 
tablish  inductively — that  is  to  say.  by  arguing  upward 
from  particular  facts — the  connection  of  such  phenomena 
with  their  causes  and  laws,  one  condition  is  entirely  in 
dispensable  :  there  must  be  the  power  of  experimentation 
in  the  rigorously  scientific  sense  of  that  word.1  But  this 
is  a  resource  from  which  the  student  of  social  and  eco 
nomic  problems  is  absolutely  debarred.  If  any  one  doubt 
this,  he  has  only  to  consider  what  an  experiment,  such 
as  would  in  physical  science  be  accounted  a  sufficient 
ground  for  a  sound  induction,  really  implies ;  that  it  im 
plies  the  possibility  of  finding  or  producing  a  set  of 
known  conditions  as  the  medium  in  which  the  experi- 

1  See  Mill's  "Logic,"  book  iii.  chap.  x. 


/j-g  THE  LOGICAL  METHOD   OF 

ment  is  performed,  and  which  shall  remain  constant 
during  its  performance.  A  chemist,  for  example,  seek 
ing  to  discover  the  character  of  a  new  substance,  places 
it  under  the  receiver  of  an  air-pump,  or  in  a  solution 
carefully  prepared  beforehand,  all  the  constituents  of 
which  are  accurately  known  to  him  ;  and  submits  it,  thus 
circumstanced,  to  certain  influences — say  to  some  known 
changes  in  temperature,  or  to  electrical  or  galvanic  ac 
tion.  Having  taken  these  precautions,  he  is  justified  in 
attributing  the  changes  which  result  to  the  causes  which 
have  been  put  in  operation  ;  and  the  mode  in  which  the 
given  substance  may  be  affected  by  the  agencies  brought 
to  bear  upon  it  is  thus  ascertained.  Where  procedure 
of  this  kind  is  practicable — and  it  is  practicable  over  the 
greater  portion  of  the  field  of  physical  inquiry — "the 
plurality  of  causes  "  and  "  the  intermixture  of  effects  "  do 
not  offer  any  insuperable  obstacle  to  the  interpretation 
of  nature  by  induction  properly  so  called  ;  it  has,  in  fact, 
been  by  this  method  that  many  of  the  most  important  dis 
coveries  in  physical  science  have  been  made.1  But  from 
any  thing  in  the  least  tantamount  or  comparable  to  this, 
the  political  economist  is,  I  need  scarcely  say,  necessarily 
excluded.  The  subject-matter  of  his  inquiries  is  human 
beings  and  their  interests,  and  with  these  he  has  no  pow 
er  to  deal  after  the  arbitrary  fashion  permissible  in  the 
other  case.  He  must  take  economic  phenomena  as  they 
are  presented  to  him  in  the  world  without  in  all  their 
complexity  and  ever-changing  variety;  but  from  facts 

1  Discoveries,  that  is  to  say,  of  ultimate  laws.  As  Mr.  Mill  lias  shown, 
the  law  of  complex  effects  is  not  amenable  to  the  method  of  simple  induc 
tion,  even  when  experiment  may  be  conducted  under  the  most  rigid  con 
ditions. — "  Logic,"  book  iii.  chaps,  x.  and  xi. 


POLITICAL  ECONOMY.  79 

as  thus  presented,  if  lie  decline  to  avail  himself  of  any 
other  path  than  that  of  strict  induction,  he  may  reason 
till  the  crack  of  doom  without  arriving  at  any  conclusion 
of  the  slightest  value.  Beyond  the  merest  empirical 
generalizations,  advance  from  such  data  is  plainly  im 
possible.  Xo  economic  or  social  truth,  meriting  the  name 
of  scientific,  ever  has  been  discovered  by  such  means, 
and  it  may  be  safely  asserted  none  ever  will  be.  What 
leads  people  to  imagine  the  contrary  is  that  in  their  rea 
soning  on  social  and  political  facts  they  are  constantly 
in  the  habit  of  combining  with  their  knowledge  of  phe 
nomena  motives  and  principles  of  conduct  so  familiar 
that  their  use  of  them  as  premises  in  their  argument 
escapes  their  notice  :  they  employ,  that  is  to  say,  quite 
unconsciously  to  themselves,  their  knowledge  of  human 
nature,  or  of  physical  or  political  conditions,  as  a  guide 
in  their  interpretation  of  the  facts  supplied  to  them  by 
the  statistician,  and  by  this  means,  no  doubt,  conclusions 
more  or  less  important  are  sometimes  arrived  at;  but, 
then,  this  is  not  to  reason  inductively  in  the  strict  sense 
of  that  expression,  but,  so  far  as  such  reasoning  admits 
of  logical  analysis,  to  combine  the  two  processes  of  in 
duction  and  deduction.  It  so  happens,  however,  that  the 
deductive  portion  of  the  operation,  resting  as  it  does  on 
familiar  assumptions  of  which  no  proof  is  given  or  need 
ed,  escapes  notice,  while  the  inductive,  which  generally 
has  to  deal  with  new  and  perhaps  striking  facts,  strongly 
arrests  attention ;  and  the  opinion  thus  gains  ground 
that  purely  inductive  reasoning  suffices  for  the  establish 
ment  of  truths  which  are  really  reached  by  a  very  dif 
ferent  path^ 

"  The  vulgar  notion,"  says  Mr.  Mill,  u  that  the  safe  raeth- 


g0  THE   LOGICAL  METHOD   OF 

ocls  on  political  subjects  are  those  of  Baconian  induction, 
that  the  true  guide  is  not  general  reasoning,  but  specific 
experience,  will  one  day  be  quoted  as  among  the  most  un 
equivocal  marks  of  a  low  state  of  the  speculative  faculties 
in  any  age  in  which  it  is  accredited.  Nothing  can  be  more 
ludicrous  than  the  sort  of  parodies  on  experimental  reason 
ing  which  one  is  accustomed  to  meet  with,  not  in  popular 
discussion  only,  but  in  grave  treatises,  when  the  affairs  of 
nations  are  the  theme.  'How,'  it  is  asked,  'can  an  insti 
tution  be  bad,  when  the  country  has  prospered  under  it?' 
'How  can  such  or  such  causes  have  contributed  to  the 
prosperity  of  one  country,  when  another  has  prospered 
without  them?'  "Whoever  makes  use  of  an  argument  of 
this  kind,  not  intending  to  deceive,  should  be  sent  back  to 
learn  the  elements  of  some  one  of  the  more  easy  physical 
sciences.  Such  reasoners  ignore  the  fact  of  plurality  of 
causes  in  the  very  case  which  affords  the  most  signal  ex 
ample  of  it.  So  little  could  be  concluded,  in  such  a  case, 
from  any  possible  collation  of  individual  instances,  that 
even  the  impossibility,  in  social  phenomena,  of  making  ar 
tificial  experiments,  a  circumstance  otherwise  so  prejudicial 
to  directly  inductive  inquiry,  hardly  affords,  in  this  case, 
additional  reason  of  regret.  For  even  if  we  could  try  ex 
periments  upon  a  nation  or  upon  the  human  race,  with  as 
little  scruple  as  M.  Majendie  tries  them  upon  dogs  or  rab 
bits,  we  should  never  succeed  in  making  two  instances 
identical  in  every  respect  except  the  presence  or  absence 
of  some  one  indefinite  circumstance.  The  nearest  approach 
to  an  experiment  in  the  philosophical  sense,  which  takes 
place  in  politics,  is  the  introduction  of  a  new  operative  el 
ement  into  national  affairs  by  some  special  and  assignable 
measure  of  Government,  such  as  the  enactment  or  repeal 
of  a  particular  law.  But  where  there  are  so  many  influ 
ences  at  work  it  requires  some  time  for  the  influence  of 
any  new  cause  upon  national  phenomena  to  become  appar 
ent  ;  and  as  the  causes  operating  in  so  extensive  a  sphere 
are  not  only  infinitely  numerous,  but  in  a  state  of  perpetual 
alteration,  it  is  always  certain  that  before  the  effect  of  the 


POLITICAL   ECONOMY.  81 

new  cause  becomes  conspicuous  enough  to  be  a  subject  of 
induction,  so  many  of  the  other  influencing  circumstances 
will  have  changed  as  to  vitiate  the  experiment."1 

The  fore^oiuor  considerations  suffice  to  show  the  utter 

O  o 

inadequacy  of  the  inductive  method,  in  the  narrower 
sense  of  that  expression,  as  a  means  of  solving  the  class 
of  problems  with  which  Political  Economy  has  to  deal, 
arising  from  the  impossibility  of  employing  experiment 
in  economic  inquiries  under  those  rigorous  conditions 
which  are  indispensable  to  give  cogency  to  our  induc 
tions.  But  if  Political  Economy  and  social  studies  gen 
erally  are  placed  at  this  serious  disadvantage  as  compared 
with  the  various  branches  of  physical  research,  on  the 
other  hand,  as  I  shall  now  proceed  to  show,  the  former 
studies  enjoy  in  their  turn  advantages  peculiar  to  them 
selves — advantages  which,  if  duly  turned  to  account,  may 
perhaps  be  found  to  go  some  considerable  way  toward 
redressing  the  balance. 


2.  Let  us  endeavor  to  realize  the  position  of  a  spec 
ulator  on  the  physical  fan  verse  at  the  outset  of  physical 
inquiry.  The  most  striking  feature  of  the  situation 
would  be  the  extraordinary  variety  and  complexity  of 
the  phenomena  presented  to  his  gaze,  contrasted  with  the 
absence  of  any  clear  indication  of  the  causes  at  work  or 
the  laws  of  their  operation.  lie  would  find  himself  in 
the  midst  of  a  mighty  maze,  possibly  not  without  a  plan, 
but  offering  to  the  student  no  apparent  clew  by  which  to 
thread  its  intricacies.  Xo  wonder  that  in  presence  of 
such  a  problem  the  primitive  thinker  should  have  yearn- 

1  "  System  of  Logic,"  book  iii.  chap.  x.  §  8  ;  and  see  for  a  fuller  discus 
sion  of  the  same  question,  book  vi.  chap.  vii.  of  the  same  work. 

I)  2 


82 


THE   LOGICAL   METHOD   OF 


ed  for  some  comprehensive  and  all-explaining  principle, 
and  should  have  directed  his  efforts  at  once  and  by  what 
ever  means  to  supply  this  capital  requirement.  "  For  the 
human  mind,"  says  Bacon,  "strangely  strains  after  and 
pants  for  this,  that  it  may  not  remain  in  suspense,  but 
obtain  something  fixed  and  immovable,  on  which  as  on 
a  firmament  it  may  rest  in  its  excursions  and  disquisi 
tions"1 — some  ultimate  force,  some  paramount  and  all- 
pervading  principle,  by  intellectual  deductions  from 
which  light  may  be  let  in  among  the  confused  and  jar 
ring  elements  of  the  world.  Accordingly,  it  was  to  the 
attainment  of  some  such  "Atlas  for  their  thoughts"  that 
the  efforts  of  the  earliest  thinkers  were  invariably  direct 
ed.  Nor  were  they  wrong  in  the  importance  they  at 
tached  to  the  possession  of  such  a  stand-point ;  only  un 
fortunately  they  mistook  the  means  of  securing  it,  and, 
instead  of  proceeding  by  sap  and  mine,  endeavored  to 
carry  the  position  by  a  coup  de  main.  Each  thinker 
made  his  guess.  According  to  one,  the  ultimate  prin 
ciple  was  water;  according  to  another,  air ;  according  to 
a  third,  number;  and  so  the  game  went  on  through  long 
ages ;  till  at  length  the  truth  began  to  dawn  that,  as  our 
knowledge  of  physical  causes  and  laws — even  of  their 
existence — comes  to  us  exclusively  through  observation 
of  their  physical  effects,  it  is  by  way  of  those  effects — 
through  the  study  of  physical  phenomena — that  the  ap 
proach  to  the  former  must  be  made,  if  made  at  all :  in 
other  words,  it  began  to  be  seen  that  the  inductive  meth 
od  was  the  only  method  suitable,  at  all  events  at  the  out 
set  of  inquiry,  to  physical  investigation.  This  truth,  rec- 

1  "De  Aug.  Scien.,"  lib.  v.  cap.  iv. 


POLITICAL   ECONOMY.  S3 

ognized  and  acted  on  at  intervals  by  a  few  here  and 
there,  was  at  length  proclaimed  by  Bacon  in  language 
which  arrested  the  attention  of  the  scientific  world,  and 
has  become  a  portion  of  the  heritage  of  mankind.  But 
the  point  to  be  attended  to  here  is  that  the  necessity  for 
the  method  of  induction  as  the  path  to  physical  discov 
ery  arose  entirely  from  the  fact  that  mankind  have  no 
direct  knowledge  of 'ultimate  physical  principles.  The 
law  of  gravitation  and  the  laws  of  motion  are  among  the 
best  established  and  most  certain  of  such  principles; 
but  what  is  the  evidence  on  which  they  rest  ?  We  do 
not  find  them  in  our  consciousness,  by  reflecting  on  what 
passes  in  our  minds ;  nor  can  they  be  made  apparent  to 
our  senses.  That  every  particle  of  matter  in  the  uni 
verse  gravitates,  each  toward  the  rest,  with  a  force  which 
is  directly  according  to  the  mass,  and  inversely  according 
to  the  square  of  the  distance — or  that  a  body  once  set  in 
motion  will,  if  unimpeded  by  some  counter  force,  con 
tinue  forever  in  motion  in  the  same  direction  and  with 
unimpaired  velocity — these  are  propositions  which  can 
only  be  established  by  an  appeal  to  the  intellect;  the 
proof  of  all  such  laws  ultimately  resolving  itself  into 
this,  that,  assuming  them  to  exist,  they  account  for  the 
phenomena.  They  are  not  the  statement  of  any  actual 
experiences,  but,  in  the  words  of  Mr.  Herbert  Spencer, 
"  truths  drawn  from  our  actual  experiences,  but  never 
presented  to  us  in  any  of  them.^}  "Men  culled,"  says 
Dr.Whewell,  "the  abstract  rule  out  of  the  concrete  ex 
periment;  although  the  rule  was  in  every  case  mixed 
with  other  rules,  and  each  rule  could  be  collected 
from  the  experiment  only  by  supposing  the  others 


34.  THE  LOGICAL  METHOD   OF 

known."1  And  what  is  true  of  the  laws  of  gravitation 
and  of  motion  is  true  equally  of  all  the  ultimate  prin 
ciples  of  physical  knowledge.  Thus  the  undulatory 
theory  of  light,  the  theory  of  the  molecular  constitution 
of  matter,  the  doctrine  of  vis  inertics — all  alike  elude 
direct  observation,  and  are  only  known  to  us  through 
their  physical  effects. 

^The  inductive  method,  therefore,  in  the  narrower  sense 
of  the  expression,  formed  the  necessary  and  inevitable 
path  by  which,  having  regard  to  the  limitation  of  the 
human  faculties,  physical  investigation  was  bound,  in  the 
outset  of  its  career,  to  proceed.  I  say  in  the  outset  of 
its  career;  because,  so  soon  as  any  of  the  ultimate  laws 
governing  physical  phenomena  were  established,  a  new 
path  by  which  to  approach  physical  problems  would  at 
once  be  opened.  The  inquirer  would  have  secured  that 
"Atlas  for  his  thoughts"  for  which  the  earlier  speculators 
sighed;  and  the  method  of  deduction  —  incomparably, 
when  conducted  under  the  proper  checks,  the  most  pow 
erful  instrument  of  discovery  ever  wielded  by  human  in 
telligence — would  now  become  possible,)  What,  accord 
ingly,  we  find  in  the  history  of  the  most  important  phys 
ical  sciences,  is  this :  a  long  period  of  laborious  inductive 
research,  during  which  the  ground  is  prepared  and  the 
seed  sown,  terminating  at  length  in  the  discovery — most 
frequently  made  at  nearly  the  same  time  by  several  in 
dependent  inquirers — of  some  one  or  two  great  physical 
truths ;  and  then  a  period  of  harvest,  in  which,  by  the 
application  of  deductive  reasoning,  the  fruits  of  the  great 
discovery  in  the  form  of  numerous  intermediate  princi- 

1  Whewell's  "History  of  the  Inductive  Sciences,"  vol.  ii.  p.  2G. 


POLITICAL  ECONOMY.  85 

pies  connecting  the  higher  principles  with  the  facts  of 
experience  are  rapidly  gathered  in.  Thus  the  progress 
of  mechanical  science  was  slow,  notwithstanding  what 
had  been  done  by  Archimedes  and  the  ancients,  till  the 
primary  dynamical  principles  were  established  by  Gali 
leo  and  his  contemporaries ;  but  these  once  firmly  seized, 
and  the  deductive  process  applied  to  the  premises  thus 
obtained,  a  crowd  of  minor  discoveries  in  mechanics,  hy 
drostatics,  and  pneumatics,  all  involved  in  the  more  fun 
damental  principles,  followed  in  rapid  succession.1  It  is 
thus  that  most  of  those  middle  principles,  the  axiomata 
media  of  physical  science,  have  been  arrived  at.  But  it 
is  not  in  the  discovery  of  axiomata  media  only  that  the 
potency  of  the  deductive  process  has  been  exemplified. 
In  combination  with  induction  it  has  frequently  been 
the  means  by  which  the  highest  physical  generalizations 
have  been  reached.  Of  this  the  most  eminent  example 
is  the  law  of  gravitation  itself,  arrived  at  by  Kewton  in 
the  main  by  way  of  deduction  from  the  dynamical  prem 
ises  supplied  by  the  discoveries  of  Galileo.  In  effect  the 
problem,  as  it  came  to  the  hands  of  Newton,  had  assumed 
nearly  this  form — to  find  a  force  which,  in  conjunction 
and  in  conformity  with  the  laws  of  motion,  will  produce 
the  planetary  movements,  already  generalized  by  Kepler.2 
The  law  of  gravitation,  indeed,  illustrates  the  potency  of 
the  deductive  method  in  a  double  sense.  It  is  at  once 
its  richest  fruit  and  its  most  fruitful  source.  It  was,  as 
I  have  just  intimated,  a  deduction  from  the  laws  of  dy 
namics  brought  to  the  interpretation  of  the  phenomena 
of  the  planetary  movements ;  and,  once  established,  it 

1  "  History  of  the  Inductive  Sciences,"  book  vi.  chaps,  iii.-vi. 
3  Ibid.,  book  vii.  chap.  ii. 


g(j  THE  LOGICAL  METHOD    OF 

became  the  great  generative  principle  from  which,  al 
ways  in  connection  with  the  data  furnished  by  observa 
tion,  all  the  later  discoveries  of  astronomy  have  been  de 
rived. 

"As  the  discovery  itself  was  great  beyond  former  ex 
ample,  the  features  of  the  natural  sequel  to  the  discovery 
were  also  on  a  gigantic  scale ;  and  many  vast  and  labori 
ous  trains  of  research,  each  of  which  might  in  itself  be  con 
sidered  as  forming  a  wide  science,  and  several  of  which  have 
occupied  many  profound  and  zealous  inquirers  from  that 
time  to  our  own  day,  come  before  us  as  parts  only  of  the 
verification  of  Newton's  theory.  Almost  every  thing  that 
has  been  done  and  is  doing  in  astronomy  falls  inevitably 
under  this  description  ;  and  it  is  only  when  the  astronomer 
travels  to  the  very  limits  of  his  vast  field  of  labor  that  lie 
falls  in  with  phenomena  which  do  not  acknowledge  the 
jurisdiction  of  the  Newtonian  legislation."1 

>s  (jt  appears,  then,  that  the  path  of  induction  was  only 
exclusively  followed  in  physical  research  pending  the 
discovery  of  ultimate  laws.  So  soon  as  the  first  great 
physical  generalization  was  established,  deduction  came 
at  once  into  play,  leading,  in  combination  with  induction 
and  the  means  of  verification  it  afforded,  to  a  rapid  ex 
tension  of  physical  knowledge.  Of  course,  as  new  phys 
ical  generalizations  of  the  higher  order  were  established, 
the  scope  for  the  employment  of  the  deductive  process 
would  be  enlarged  ;  and  the  effect  would  be  a  gradual 
change  in  the  logical  character  of  the  physicist's  prob 
lem,  and  by  consequence  in  his  method.  At  the  outset  of 
investigation  the  problem  was — given  the  phenomena, 
to  find  the  causes  and  laws,  and  the  only  feasible  course 

1  See  "  History  of  the  Inductive  Sciences,"  vol.  ii.  p.  195. 


POLITICAL   ECONOMY.  gf 

of  procedure  was  induction ;  but,  as  more  and  more  prin 
ciples  were  discovered,  the  problem  came  gradually  to  as 
sume  another  form,  namely  this — given  the  phenomena 
and  certain  causes  and  laws  affecting  them,  to  find  the 
other  causes  and  laws  implicated  in  the  results.  The 
student  was  gradually  getting  possession  of  both  ends 
of  the  chain,  and  his  task  was  being  narrowed  to  deter 
mining  the  intervening  links. 

§  3.  I  have  been  at  pains  to  bring  clearly  before  your 
minds  the  logical  nature  of  the  physical  problem  as  it 
presented  itself  at  the  outset  of  speculation  to  the  inves 
tigator  of  physical  nature,  and  as  it  now  presents  itself, 
in  order  that  you  may  fairly  appreciate  in  what  degree 
the  analogy  holds  between  physical  investigation  and 
the  class  of  inquiries  with  which  we  are  here  concerned. 
Some  pages  back  I  remarked  that  if  the  economist  was 
at  a  disadvantage  as  compared  with  the  physical  investi 
gator  in  being  excluded  from  experiment,  he  had  also 
some  compensating  circumstances  on  his  side.  The  nat 
ure  of  these  compensating  circumstances  will  now  be 
come  apparent.  The  economist  starts  with  a  knowledge 
of  ultimate  causes.  He  is  already,  at  the  outset  of  his 
enterprise,  in  the  position  which  the  physicist  only  at 
tains  after  ages  of  laborious  research.  If  any  one  doubt 
this,  he  has  only  to  consider  what  the  ultimate  principles 
governing  economic  phenomena  are.  As  explained  in 
my  last  lecture,  they  consist  of  such  facts  as  the  following: 
certain  mental  feelings  and  certain  animal  propensities 
in  human  beings;  the  physical  conditions  under  which 
production  takes  place  ;  political  institutions ;  the  state 
of  industrial  art :  in  other  words,  the  premises  of  Polit- 


gg  THE  LOGICAL  METHOD   OF 

ical  Economy  are  the  conclusions  and  proximate  phe 
nomena  of  other  branches  of  knowledge.  These  are  the 
sources  from  which  the  phenomena  of  wealth  take  their 
rise,  precisely  as  the  phenomena  of  the  solar  system  take 
their  rise  from  the  physical  forces  and  dynamical  laws 
of  the  physical  universe;  precisely  as  the  phenomena  of 
optical  science  are  the  necessary  consequences  of  the 
waves  of  the  luciferous  medium  striking  on  the  nerves 
of  the  eye.  For  the  discovery  of  such  premises  no  elabo 
rate  process  of  induction  is  needed.  In  order  to  know, 
e.  g.,  why  a  farmer  engages  in  the  production  of  corn, 
why  he  cultivates  bis  land  up  to  a  certain  point,  and  why 
he  does  not  cultivate  it  further,  it  is  not  necessary  that 
we  should  derive  our  knowledge  from  a  series  of  gen 
eralizations  proceeding  upward  from  the  statistics  of  corn 
and  cultivation,  to  the  mental  feelings  which  stimulate 

'  O 

the  industry  of  the  farmer,  on  the  one  hand,  and,  on  tbe 
other,  to  the  physical  qualities  of  the  soil  on  which  the 
productiveness  of  that  industry  depends.  It  is  not  nec 
essary  to  do  this — to  resort  to  this  circuitous  process — 
for  this  reason,  that  we  have,  or  may  have  if  we  choose 
to  turn  our  attention  to  the  subject,  direct  knowledge  of 
these  causes  in  our  consciousness  of  what  passes  in  our 
own  minds,  and  in  the  information  which  our  senses  con 
vey,  or  at  least  are  capable  of  conveying,  to  us  of  exter 
nal  facts.  Every  one  who  embarks  in  any  industrial  pur 
suit  is  conscious  of  the  motives  which  actuate  him  in 
doing  so.  lie  knows  that  he  does  so  from  a  desire, 
for  whatever  purpose,  to  possess  himself  of  wealth ;  he 
knows  that,  according  to  his  lights,  he  will  proceed  to 
ward  his  end  in  the  shortest  way  open  to  him ;  that,  if 
not  prevented  by  artificial  restrictions,  he  will  buy  such 


POLITICAL  ECONOMY.  89 

materials  as  he  requires  in  the  cheapest  market,  and  sell 
the  commodities  which  he  produces  in  the  dearest.  Ev 
ery  one  feels  that  in  selecting  an  industrial  pursuit, 
where  the  advantages  are  equal  in  other  respects,  he  will 
select  that  in  which  he  may  hope  to  obtain  the  largest 
remuneration  in  proportion  to  the  sacrifices  he  under 
goes  ;  or  that  in  seeking  for  an  investment  for  what  lie 
has  realized,  he  will,  where  the  security  is  equal,  choose 
those  stocks  in  which  the  rate  of  interest  to  be  obtained 
is  highest.  With  respect  to  the  other  causes  on  which 
the  production  and  distribution  of  wealth  depend — the 
physical  properties  of  natural  agents,  and  the  physiolog 
ical  character  of  human  beings  in  regard  to  their  capac 
ity  for  increase — for  these  also  direct  proof,  though  of  a 
different  kind,  is  available;  proof  which  appeals  not  in 
deed  to  our  consciousness,  but  to  our  senses.  Thus,  e.  g., 
the  law  of  the  diminishing  productiveness  of  the  soil  to 
repeated  applications  of  capital,  if  seriously  questioned, 
is  capable  of  being  established  by  direct  physical  experi 
ment  upon  the  soil,  of  the  result  of  which  our  senses  may 
be  the  judges.  If  political  economists  do  not  perform 
this  experiment  themselves  in  order  to  establish  the  fact, 
it  is  only  because  every  practical  farmer  performs  it  for 
them.  In  the  case  of  the  physical  premises,  therefore, 
of  Political  Economy,  equally  with  the  mental,  we  are 
entirely  independent  of  those  refined  inductive  processes 
by  which  the  ultimate  truths  of  physical  science  are  es 
tablished. 

§  4.  The  economist  may  thus  be  considered  at  the 
outset  of  his  researches  as  already  in  possession  of  those 
ultimate  principles  governing  the  phenomena  which  form 


90  THE   LOGICAL  METHOD    OF 

the  subject  of  his  study,  the  discovery  of  which  in  the 
case  of  physical  investigation  constitutes  for  the  inquirer 
his  most  arduous  task;  but,  on  the  other  hand,  he  is  ex- 
f eluded  from  the  use  of  experiment.  There  is,  however, 
an  inferior  substitute  for  this  powerful  instrument^  his 
disposal,  on  which  it  may  be  worth  while  here  to  say  a 
few  words.  I  refer  to  the  employment  of  hypothetical 
cases  framed  with  a  view  to  the  purpose  of  economic  in 
quiry.  For,  although  precluded  from  actually  produc 
ing  the  conditions  suited  to  his  purpose,  there  is  nothing 
to  prevent  the  economist  from  bringing  such  conditions 
before  his  mental  vision,  and  from  reasoning  as  if  these 
only  were  present,  while  some  agency  comes  into  opera 
tion — whether  it  be  a  human  feeling,  a  material  object, 
or  a  political  institution  —  the  economic  character  of 
which  he  desires  to  examine.  I  If,  for  example,  his  pur 
pose  be  to  ascertain  the  relation  subsisting  between  the 
quantity  of  money  in  circulation  in  any  given  area  of 
exchange  transactions  and  its  value,  he  might  make  some 
such  supposition  as  this :  1,  in  a  given  state  of  produc 
tive  industry  a  certain  number  and  amount  of  exchange 
transactions  to  be  performed ;  2,  a  certain  amount  of 
money  in  circulation ;  3,  a  certain  degree  of  efficiency 
(in  the  sense  explained  bjr  Mr.  Mill1)  in  the  discharge 
of  its  functions  by  this  money ;  lastly,  a  certain  addition 
made  to  the  money  already  in  circulation.  These  con 
ditions  being  supposed,  and  being  also  supposed  to  re 
main  constant,  the  scene  of  the  experiment  would  be 
prepared.  It  is  true  the  action  of  the  added  money  can 
not  be  made  apparent  to  the  senses  of  the  economist,  or 

1  "Principles  of  Political  Economy,"  vol.  ii.  p.  18.     Sixth  Edition. 


POLITICAL  ECONOMY.  91 

to  those  of  his  hearers  or  readers,  but  from  his  knowl 
edge  of  the  purposes  for  which  money  is  used,  and  of 
the  motives  of  human  beings  in  the  production  and  ex 
change  of  wealth,  it  will  be  in  his  power  to  trace  the 
consequences  which  in  the  assumed  circumstances  would 
ensue.  These  he  would  find  to  be  an  advance  in  the 
prices  of  commodities  in  proportion  to  the  augmentation 
of  the  monetary  circulation;  a  result  from  which  lie 
would  be  justified  in  formulating  the  doctrine  that, 
other  things  being  the  same,  the  value  of  money  is  in 
versely  as  its  quantity  A  Or  again,  supposing  the  object 
be  to  ascertain  the  law  governing  agricultural  rent,  the 
economist  might  take  as  his  hypothesis  the  following 
conditions :  1,  a  certain  state  of  agricultural  skill ;  2,  a 
capacity  of  the  soil  to  yield  certain  returns  on  the  appli 
cation  of  capital  and  labor  in  certain  proportions ;  3,  a 
tendency  in  the  soil  to  yield  diminished  proportional 
returns  after  a  certain  point  in  cultivation  has  been 
reached ;  4,  different  degrees  of  fertility  in  different 
soils;  lastly,  the  land  owned  by  one  class  of  persons, 
while  another,  in  possession  of  capital,  desires  to  occu 
py  it  for  the  purpose  of  cultivation.  These  suppositions 
being  made,  he  would  then  take  account  of  the  known 
motives,  on  the  one  hand,  of  farmers,  on  the  other  of 
landlords  in  their  dealings  concerning  rent,  and  would 
deduce  from  these,  in  connection  with  the  supposed  cir 
cumstances,  the  amount  of  rent  which  the  latter  would 
be  content  to  receive  and  the  former  to  pay.  The  con 
ditions  determining  agricultural  rent  would  thus  be  as- 

O        O 

certained.  (It  is  true  the  conclusion  arrived  at  would 
represent  hypothetical  truth  merely  —  that  is  to  say, 
would  express  a  law  true  only  in  the  absence  of  dis- 


92  THE  LOGICAL  METHOD    OF 

turbing  causes;  but,  as  I  have  already  explained,1  so 
much  qualification  as  this  must  be  understood  of  all 
scientific  laws  whatever.  Putting  aside  mere  empirical 
generalizations,  no  law  of  nature,  it  matters  not  whether 
the  sphere  of  inquiry  be  physical,  mental,  or  economic, 
is  true  otherwise  than  hypothetically  —  than  in  the  ab 
sence  of  disturbing  causes.  The  process,  then,  which  I 
have  been  describing  is  one  mode  by  which  a  knowl 
edge  of  economic  laws  may  be  reached ;  and  I  think 
you  will  perceive  that  it  is  in  the  nature  of  an  experi 
ment  conducted  mentally.  I  am  far,  indeed,  from  say 
ing  that  it  is  not  very  inferior,  as  an  agency  for  the  dis 
covery  of  truth,  to  the  sensible  physical  process  for 
which  it  is  the  substitute ;  since,  while  the  actual  opera 
tions  of  nature  can  not  err,  there  is  in  a  hypothetical  ex 
periment  always  the  danger,  not  only  that  some  of  the 
conditions  supposed  to  be  present  may,  in  the  course  of 
ratiocination,  be  overlooked,  but  also  of  a  flaw  in  the 
reasoning  by  which  the  action  of  the  particular  cause 
under  consideration  is  established.  And  this  renders  it 
expedient  that  the  process  in  question  should,  as  far  as 
possible,  be  supplemented  by  such  sorts  of  verification  as 
economical  inquiry  admits  of.  For  example,  it  is  open 
to  the  economist,  having  worked  out  his  problem  in  the 
mann'er  described,  to  look  out  for  some  actual  instance 
which  approximates  in  as  many  of  its  principal  circum 
stances  as  possible  to  those  of  his  hypothesis.  Having 
found  one,  he  can  observe  how  far  the  results  realized 
in  the  actual  case  correspond  with  his  hypothetical  con 
clusions  ;  and  in  case,  as  would  usually  happen,  the  cor- 

1  Ante,  pp.  69,  70. 


POLITICAL   ECONOMY.  93 

respondence  was  not  complete,  lie  would  have  to  consider 
how  far  the  discrepancy  admitted  of  being  explained  by 
reference  to  the  presence  of  known  disturbing  causes. 
Unfortunately,  for  reasons  already  indicated,  verification 
can  never  in  economic  inquiry  be  otherwise  than  very  im 
perfectly  performed ;  but  this  notwithstanding,  if  care 
fully  conducted  it  is  often  capable  of  furnishing  suffi 
cient  eorroboration  to  the  processes  of  deductive  reason 
ing  to  justify  a  high  degree  of  confidence  in  the  conclu 
sions  thus  obtained. 

In  this  way  may  hypothesis  be  made  to  serve  as  in 
some  sort  a  substitute  for  experiment  in  economic  inves 
tigation  ;  and  in  point  of  fact  it  lias  been  by  this  means 
that  not  a  few  important  doctrines  of  the  science  have 
been  worked  out.  The  writer  who  has  employed  this 
particular  resource  most  freely  and  with  the  most  effect 
is  Ricardo ;  nor  could  a  more  decisive  proof  be  given  of 
the  ignorance  generally  prevailing  on  the  subject  of  meth 
od  in  Political  Economy  than  is  furnished  by  the  flippant 
attacks  which  have  been  made  upon  this  eminent  think 
er  from  so  many  quarters  on  this  account.  In  employ 
ing  the  method  of  reasoning  on  hypothetical  cases,  Ri- 
cardo,  in  effect,  employed,  as  far  as  the  natur^  of  his 
problem  and  the  circumstances  of  the  case  permitted, 
that  experimental  method  which  those  who  would  dis 
parage  his  great  achievements  affect  to  extol,  but  the 
real  nature  of  which,  as  their  criticisms  show,  they  so  lit 
tle  understand.  Here  is  an  example  of  the  manner  in 
which  he  could  wield  this  instrument  of  economic  re 
search.  The  question  under  consideration  was  the  fun 
damental  principle  of  international  trade,  and  Ricardo 
wished  to  show  that  it  misrht  be  the  interest  of  a  count rv 


94  THE  LOGICAL  METHOD  OF 

to  import  an  article  from  another,  even  though  it  were 
in  its  power  to  produce  the  imported  article  itself  at  less 
cost  than  it  was  produced  at  in  the  country  from  which 
it  came.  This,  at  first  view,  paradoxical  position,  Ricar- 
do  thus  by  means  of  a  simple  hypothesis  (which,  while  it 
divested  the  problem  of  all  its  accidental  complications, 
brought  into  clear  light  the  few  essential  conditions  on 

C5  O 

which  its  solution  depended)  was  enabled  to  establish ;  it 
being  evident  that,  under  the  supposed  circumstances,  the 
known  motives  of  men  in  the  pursuit  of  wealth  could 
only  lead  to  the  very  result  asserted.  "  Two  men,"  he 
says,  "  can  botli  make  shoes  and  hats,  and  one  is  superior 
to  the  other  in  both  employments  ;  but  in  making  hats 
he  can  only  exceed  his  competitor  by  one  fifth,  or  20  per 
cent.,  while  in  making  shoes  he  can  excel  him  by  one 
third,  or  33  per  cent. ;  will  it  not  be  to  the  interest  of 
both  that  the  superior  man  should  employ  himself  exclu 
sively  in  making  shoes,  and  the  inferior  man  in  making 
hats  V  l 

In  further  confirmation  of  what  I  have  said  as  to  the 
nature  of  the  ultimate  premises  of  the  physical  sciences 
in  contrast  with  those  of  Political  Economy,  I  would  ask 
you  now  to  consider  the  different  use  to  which  hypothe 
sis  is  put  in  the  former  department  of  knowledge.  In 
Political  Economy,  as  we  have  just  seen,  hypothesis  is 
used  in  order  to  supply  the  reasoner  mentally  with  those 
known  and  constant  conditions  which  are  essential  to  the 
development  deductively  of  the  fundamental  assump 
tions  of  the  science,  but  from  the  production  of  which 
in  actual  existence  he  is  precluded  by  the  nature  of  the 

1  Eicardo's  Works,  McCulloch's  edition,  p.  77. 


POLITICAL    ECONOMY.  05 

case  ;  and  in  this  way,  as  I  have  explained,  it  may  be  re 
garded  as  a  substitute  for  experiment ;  in  physical  inves 
tigation,  on  the  other  hand,  as  the  required  conditions 
can  actually  be  produced,  there  is  no  need  to  assume 
them  hypothetically,  and  accordingly  this  is  never  done. 
For  what  purpose,  then,  is  hypothesis  used  in  physical 
research?  Always  as  a  means  of  arriving  at  ultimate' 
causes  and  laws.  Such  causes  and  laws  not  being  sus 
ceptible  of  direct  proof,  through  an  appeal  to  the  con 
sciousness  or  senses,  conjecture,  guess,  hypothesis,  is  the 
natural,  as  it  is  in  truth  the  only  possible  path  by  which 
they  may  be  reached.  Accordingly,  the  physicist  frames 
an  hypothesis  as  to  the  nature  of  those  causes  and  laws, 
and  having  done  so,  proceeds  to  bring  together  conditions 
fitted  to  test  the  correctness  of  his  guesses — that  is  to  say, 
he  institutes  experiments  to  verify  his  hypothesis.  Such 
a  course  would  be  obviously  unsuitable  in  the  analogous 
case  in  economic  investigation.  Ko  one  thinks  of  fram 
ing  an  hypothesis  as  to  the  motives  which  induce  men 
to  engage  in  industry,  to  prefer  remunerative  to  unre- 
innncrative  occupations,  or  to  embark  their  earnings  in 
investments  which,  ceteris  paribus,  promise  the  best  re 
turns  ;  or,  again,  as  to  the  causes  which,  in  a  given  state 
of  agricultural  knowledge  and  skill,  set  a  permanent  lim 
it  to  the  application  of  capital  and  labor  to  the  soil ; 
any  more  than  as  to  those  on  which  depend  the  continu 
ance  and  growth  of  population.  Conjecture  here  would 
manifestly  be  out  of  place,  inasmuch  as  we  possess  in 
our  consciousness  and  in  the  testimony  of  our  senses,  as 
I  have  already  shown,  direct  and  easy  proof  of  that 
which  we  desire  to  know.  In  Political  Economy,  ac 
cordingly,  hypothesis  is  never  used  as  a  help  toward  the 


9(3  THE  LOGICAL  METHOD   OF 

discovery  of  ultimate  causes  and  laws;  just  as  in  physic 
al  investigation  it  is  never  used  as  a  substitute  for  ex 
periment.1 

Such,  then,  are  the  positions  respectively  of  the  econo 
mist  and  of  the  physical  philosopher  with  reference  to 
the  logical  nature  of  the  problem  with  which  each  has  to 
deal.  And  this  being  so,  what  can  argue  greater  igno 
rance  of  the  conditions  of  the  case — at  once  of  the  real 
nature  of  the  precedents  furnished  by  the  physical  sciences, 
and  of  the  character  of  the  economic  problem,  than  to 
appeal  to  the  former,  as  is  constantly  done,  in  justifica 
tion  of  the  exclusive  use  of  the  purely  inductive  method 
in  economical  research.  It  is  to  overlook  alike  the  pe 
culiar  weakness  and  the  peculiar  strength  of  the  econ 
omist's  position.  It  is  to  advocate  for  Political  Econ 
omy  a  method  which  is  only  powerful  in  physical  inves 
tigation,  because  the  physicist  can  employ  it  in  connec 
tion  with  conditions  from  the  realization  of  which  the 
economist  is  from  the  nature  of  his  inquiry  precluded  ; 
and  to  refuse  to  employ  an  engine  of  discovery  ready  to 
our  hands,  which  the  physicist  has  spent  centuries  of  la 
borious  speculation  in  his  efforts  to  attain,  and  which, 
once  possessed,  has  proved  the  most  potent  of  all  his  ap 
pliances.  What  the  precedents  of  physical  science,  right 
ly  understood,  teach  the  economist  is  to  regard  deduction 
as  his  principal  resource  ;  the  facts  furnished  by  observa 
tion  and  experience  being  employed,  so  far  as  circum 
stances  permit,  as  the  means  of  verifying  the  conclusions 
thus  obtained,  as  well  as,  where  discrepancies  are  found 
to  occur  between  facts  and  his  theoretical  reasonings, 

1  See  Appendix  C. 


POLITICAL   ECONOMY.  97 

for  ascertaining  the  nature  of  the  disturbing  causes  to 
which  such  discrepancies  are  due.  It  is  in  this  way,  and 
in  this  way  only,  that  the  appeal  to  experience  is  made 
in  those  physical  sciences  which  have  reached  the  deduct 
ive  stage — that  is  to  say,  which  in  the  logical  character 
of  their  problems  present  any  real  analogy  to  economic 
science. 


§  5.  In  connection  with  the  processes  just  referred  to 
of  verification  and  the  discovery  of  disturbing  causes,  or 
(to  express  the  same  idea  differently)  the  discovery  of 
the  minor  influences  affecting  economic  phenomena,  we 
find  the  proper  place  of  statistics**!!  economic  reasoning. 
Statistics  are  collections  of  facts  arranged  and  classified 
with  a  view  to  particular  inquiries ;  and  it  is  by  avail 
ing  ourselves  of  this  systematized  method  of  observation 
that  we  can  most  effectually  check  and  verify  the  accu 
racy  of  our  reasoning  from  the  fundamental  assumptions 
of  the  science ;  while  the  same  expedient  offers  also  by 
much  the  most  efficacious  means  of  bringing  into  view  the 
action  of  those  minor  or  disturbing  agencies  which  mod 
ify,  sometimes  so  extensively,  the  actual  course  of  events. 
The  mode  in  which  these  latter  influences  affect  the  phe 
nomena  of  wealth  is,  in  general,  unobvious,  and  often  in 
tricate,  so  that  their  existence  does  not  readily  discover 
itself  to  a  reasoner  engaged  in  the  development  of  the 
more  capital  economic  doctrines.  In  order  to  their  de 
tection,  therefore,  attention  must  be  drawn  to  the  effects 
which  they  produce ;  and  this,  as  I  have  said,  can  be 
best  done  by  the  use  of  statistics  in  constant  connection 
with  deductive  ratiocination. 

It  is  important  to  observe  that  the  relation  of  statistics 

E 


93  THE  LOGICAL  METHOD  OF 

to  Political  Economy  is  in  no  respect  different  from  that 
in  which  they  stand  to  other  sciences  which  have  reach 
ed  the  deductive  stage.  The  registered  observations  of 
the  astronomer  are  the  statistics  of  astronomy,  which  it 
is  his  business  to  compare  with  the  conclusions  theoretic 
ally  evolved  from  the  dynamical  principles  constituting 
the  premises  of  his  science,  and  for  purposes  strictly  an 
alogous  to  those  which  have  just  been  described.1  In 
those  sciences,  indeed,  which  admit  of  experiment,  as, 
e.  g.,  chemistry,  formal  statistics  are  little  used.  Statistics 
here  are  unnecessary,  because  experiment  affords,  only  in 
a  more  efficacious  way,  the  means  of  instituting  the  same 
comparison.  But  what  are  known  by  the  chemist  as 
"residual  phenomena"  are  precisely  analogous  to  those 
discrepancies  between  the  ^conclusions  of  the  economist 
and  the  facts  of  the  statistician  to  which  I  have  been 
adverting,  and  lead  in  the  same  way  to  the  discovery  of 
new  elements  or  principles  before  overlooked. 

Such  is  the  method  of  investigation  which  the  nature 
of  the  evidence  available  in  economic  inquiry,  as  well  as 

1  "For  example:  the  return  of  the  comet  predicted  by  Professor  Encke, 
a  great  many  times  in  succession,  and  the  general  good  agreement  of  its 
calculated  with  its  observed  place  during  any  one  of  its  periods  of  visibil 
ity,  would  lead  ns  to  say  that  its  gravitation  toward  the  sun  and  planets 
is  the  sole  and  sufficient  cause  of  all  the  phenomena  of  its  orbitual  motion  ; 
but  when  the  effect  of  this  cause  is  strictly  calculated  and  subducted  from 
the  observed  motion,  there  is  found  to  remain  behind  a  residual  phenome 
non,  which  would  never  have  been  otherwise  ascertained  to  exist,  which  is 
a  small  anticipation  of  the  time  of  its  reappearances  or  a  small  diminution 
of  its  periodic  time,  which  can  not  be  accounted  for  by  gravity,  and  whose 
cause  is  therefore  to  be  inquired  into.  Such  an  anticipation  would  be 
caused  by  the  resistance  of  a  medium  disseminated  through  the  celestial 
regions ;  and  as  there  are  other  good  reasons  for  believing  this  to  be  a 
vera  causa,  it  has  therefore  been  ascribed  to  such  a  resistance." — 
Natural  Philosophy ',  p.  156. 


SOLUTION  OF  AN  ECONOMIC  PROBLEM. 

So  far,  then,  the  analogy  between  a  "law"  as  under 
stood  in  Political  Economy  and  a  "law"  as  understood 
in  the  more  advanced  physical  sciences  holds  good.  In 
the  present  lecture  I  propose  to  call  your  attention  to  a 
circumstance  in  which  this  analogy  fails,  and  to  the  con 
sequences  which  result  from  this  failure  in  the  develop 
ment  of  economic  truth.  In  both  departments  of  specu 
lation  alike  a  law  of  nature  expresses  a  tendency  con 
stantly  influencing  phenomena ;  but  in  the  physical  sci 
ences  the  discovery  of  a  law  of  nature  is  never  consider 
ed  complete  till,  in  addition  to  the  general  tendency,  an 
exact  numerical  expression  is  found  for  the  degree  of 
force  with  which  the  tendency  in  question  operates. 

"  It  is  the  character,"  says  Sir  John  Herschel,1  "  of  all 
the  higher  laws  of  nature  to  assume  the  form  of  precise 
quantitative  statement.  Thus  the  law  of  gravitation,  the 
most  universal  truth  at  which  human  reason  has  yet  ar 
rived,  expresses  not  merely  the  general  fact  of  the  mutual 
attraction  of  all  matter;  not  merely  the  vague  statement 
that  the  influence  decreases  as  the  distance  increases,  but 
the  exact  numerical  rate  at  which  that  decrease  takes  place; 
so  that,  when  its  amount  is  known  at  any  one  distance,  it 
may  be  calculated  exactly  for  any  other.  Thus,  too,  the 
laws  of  crystallography,  which  limit  the  forms  assumed  by 
natural  substances,  when  left  to  their  own  inherent  powers 
of  aggregation,  to  precise  geometrical  figures  with  fixed 
angles  and  proportions,  have  the  same  essential  character 
of  strict  mathematical  expression,  without  which  no  exact 
particular  conclusions  could  ever  be  drawn  from  them." 

To  give  one  example  more,  the  use  of  the  balance  has 
brought  chemistry  into  the  category  of  those  sciences 
the  laws  of  which  admit  of  quantitative  statement. 

1  "Natural  Philosophy,"  p.  123. 


120 


SOLUTION   OF  AN  ECONOMIC  PROBLEM 


The  chemist  is  consequently  able,  not  merely  to  describe 
the  general  nature  of  the  reaction  which  will  take  place 
between  certain  substances  under  known  conditions,  but 
can  give  beforehand  a  numerical  statement  of  the  exact 
proportions  in  which  the  several  elements  will  unite  in 
the  resulting  compound. 

This  is  a  degree  of  perfection,  however,  which  it  does 
not  seem  possible  that  Political  Economy,  any  more  than 
jurisprudence,  philology,  or  any  of  those  branches  of 
speculation  which  derive  their  premises  from  the  prin 
ciples  of  human  nature,  should  ever  attain.1  For,  al 
though  the  general  character  of  these  principles  may  bo 
ascertained,  and  although  when  stated  with  sufficient 
precision  they  may  be  made  the  basis  of  important  de 
ductions,  yet  they  do  not,  from  the  nature  of  the  case, 
admit  of  being  weighed  and  measured  like  the  elements 
and  forces  of  the  material  world  :  they  are  therefore  not 
susceptible  of  arithmetical  or  mathematical  expression ; 
and  hence  it  happens  that,  in  speculating  on  results  which 
depend  on  the  positive  or  relative  strength  of  such  prin 
ciples,  perfect  precision,  numerical  accuracy,  is  not  at 
tainable.  Political  Economy  seems  on  this  account  nec-\ 
essarily  excluded  from  the  domain  of  exact  science.2  I 


1  This  remark  might,  perhaps,  be  extended  to  embrace  the  organic  sci 
ences  in  general.     The  laws  of  organic  development,  for  example,  express 
ing  general  tendencies,  are  never  formulated  in  other  than  general  terms. 
See  "Habit  and  Intelligence,1'  by  J.  J.  Murphy,  vol.  i.  pp.  201,  202,  212. 

2  Mr.  Macleod  considers  Monetary  Science  (which  he  appears  to  regard 
as  commensurate  or  nearly  so  with  Political  Economy)  as  "an  exact  sci 
ence."     In  the  Introduction  to  his  "Theory  and  Practice  of  Banking," 
vol.  ii.  p.  25,  he  writes  as  follows  :    "  These  principles  then  act  with  unerr 
ing  certainty — they  are  universally  true — human  instinct  is  as  certain,  in 
variable,  and  universal  in  its  nature  as  the  laws  of  motion — AND  THAT  is 

THE   CIRCUMSTANCE  WHICH  RAISES  MONETARY  SCIENCE   TO  THE  RANK  OF 


NOT  SUSCEPTIBLE   OF  EXACTNESS.  \9.i 

This  quality  of  economic  doctrines  will  be  made  more 
clear  by  a  few  examples. 

AN  EXACT  OR  INDUCTIVE  SCIENCE.  It  is  this  which  renders  it  possible 
to  establish  it  upon  as  sure,  solid,  and  imperishable  a  basis  as  mechan 
ical  science.  Alone  of  all  tbe  political  sciences  its  phenomena  may  be  ex 
pressed  with  the  unerring  certainty  of  the  other  laws  of  nature."  (The 
capitals  are  the  author's.)  Mr.  Macleod  seems  to  confound  an  "exact" 
with  a  positive  science.  In  order  that  a  science  be  "exact,"  it  is  neces 
sary,  not  only  that  its  premises  be  "  universal  and  invariable,"  but,  further, 
that  they  be  susceptible  of  precise  quantitative  statement.  If  Mr.  Macleod 
can  show  that  both  these  conditions  are  satisfied  iu  the  present  instance — 
that  the  character  of  "human  instinct  "can  be  known,  and  also  that  its 
force  can  be  measured,  as  the  farce  of  gravitation — he  will  then  have  estab 
lished  a  basis  for  an  exact  science  of  Political  Economy. 

Mr.  Jennings,  in  his  "Natural  Elements  of  Political  Economy, "appears 
to  take  the  same  view.  "Our  instruments,"  he  says,  "  though  acting  on 
and  through  the  principles  of  human  nature,  are  found  to  consist  of  me 
tallic  indices  [money]  related  as  parts  and  multiples,  and  not  less  capable 
of  being  made  subservient  to  the  processes  of  exact  calculation  than  are  the 
instruments  of  any  purely  physical  act.  The  results  of  these  principles 
when  observed  may  be  expressed  in  figures ;  as  may  also  the  anticipated 
results  of  their  future  operation,  or  such  relations  as  those  of  Quantity  and 
Value,  Value  and  Kate  of  Production,  may  be  exhibited  in  the  formula} 
and  analyzed  by  the  different  methods  of  Algebra  and  of  Fluxions"  (pp. 
259-260). 

There  is  no  doubt  that  economic  results,  when  they  have  happened,  mny 
be  expressed  in  figures  ;  but  I  apprehend  something  more  than  this  is  req 
uisite  to  render  a  science  "exact."  Mr.  Jennings  indeed  adds,  "as  may 
also  the  anticipated  results  of  their  future  operation  ;"  but  the  question  is, 
Have  we  such  data  as  will  warrant  us  in  accepting  as  trustworthy  the  re 
sults  thus  obtained  ?  Will  our  calculations  turn  out,  not  merely  general 
ly,  but  "exactly"  true?  Instead  of  dealing  in  general  terms,  let  us  take 
a  specific  case — the  determination  of  the  price  of  com — and  consider  what 
in  this  instance  would  be  necessary'  in  order  to  arrive  at  an  "  exact"  result. 
The  following  is  taken  from  Tooke's  "History  of  Prices:"  "  But,  further, 
supposing  that  both  the  results  of  the  harvest  and  the  stock  on  hand  were 
made  known  with  sufficient  approach  to  accuracy  by  government  returns, 
there  would  yet  remain  the  greatest  uncertainty  in  the  corn  markets  unless 
the  probable  extent  of  the  supplies  from  abroad  could  be  known.  And, 
granting  all  these  grounds  for  estimates  of  actual  and  forthcoming  supplies 
to  be  within  the  power  of  government  to  ascertain,  there  would  be  yet 
another  influence  on  prices — and  consequently  a  cause  of  fluctuation — 
namely,  the  speculative  views  operating  on  the  minds  of  both  buyers  and 

F 


122       SOLUTION  OF  AN  ECONOMIC  PROBLEM 

The  decline  of  profits,  as  nations  advance  in  wealth 
and  numbers,  is  a  circumstance  which  has  long  attracted 
the  attention  of  economists.  It  has  also  been  observed 
that,  in  the  course  of  this  progress,  a  minimum  point  is 
attained,  beyond  which  profits  do  not  farther  decline ; 

sellers  in  the  contemplation  of  circumstances  likely  to  affect  the  produce 
of  the  next  ensuing  harvest.  From  the  time  of  sowing  to  that  of  gather 
ing  the  wheat  crop,  the  casualties  of  the  weather  exercise  an  influence  on 
the  markets,  and  thus  cause  fluctuations  at  critical  periods  of  the  season. 
Among  the  claims  put  forth  for  agricultural  statistics,  it  has  been  required, 
as  a  part  of  the  information  insisted  upon,  that  there  should  be  periodical 
government  returns  of  the  appearance  of  the  growing  crops. 

"  These,  and  other  contingencies  more  or  less  important,  are  causes  of 
fluctuation  from  uncertainty  of  supply.  But  assuming,  for  mere  argu 
ment  sake,  the  statistics  of  supply  to  be  perfect,  there  still  remain  the  un 
certainties  of  demand. 

"For  the  reasons  which  I  have  before  stated,  the  variations  of  consump 
tion  are  on  a  much  smaller  scale  than  those  of  supply  ;  but  the  demand  on 
the  markets  may  occasionally  have  a  considerable  temporary  influence  on 
prices,  as  in  the  case  of  the  autumn  of  1854,  of  the  millers  and  bakers  try 
ing  to  get  into  stock,  after  having  left  themselves  bare.  There  may  like 
wise  be  a  demand  for  Exportation  to  France  or  to  other  parts  of  the  Conti 
nent.  How  could  any  information  from  government  have  supplied  the 
statistics  of  such  a  demand  ?  But  adopting  the  extreme  and  extravagant 
hypothesis  that  all  these  elements  of  uncertainty  admitted  of  having  great 
light  thrown  upon  them  by  statistics  and  other  information  published  by 
government,  there  would  still  remain  to  be  solved  the  problem  of  what  the 
price  ought* in  consequence  to  be ;  and  this,  I  will  venture  to  say,  will  be 
found  to  be  an  insoluble  problem." — Vol.  v.  pp.  88,  89. 

In  order  that  the  problems  of  Political  Economy  should  be  made  sub 
servient  to  "exact"  treatment,  it  would  be  necessary,  not  only  that  "  the 
instruments,  on  and  through  which  the  principles  of  human  nature  [in  the 
pursuit  of  wealth]  act,"  should  be  capable  of  quantitative  measurement, 
but  also  that  the  principles  themselves,  as  well  as  the  conditions  under 
which  they  come  into  operation,  should  be  susceptible  of  exact  numerical 
statement.  The  most  perfect  system  of  weights  and  measures  would  never 
have  made  chemistry  an  exact  science,  if  the  law  of  equivalent  proportions 
had  not  been  discovered. 

Some  forcible  remarks  in  the  same  sense  will  be  found  in  the  "  Philo 
sophic  Positive, "  tome  iv.  pp.  512, 513.  The  attempt  to  employ  mathemat 
ical  formulas  in  inquiries  of  the  social  order  M.  Comte  regards  as  "I'invo- 
lontaire  ternoignage  de'jisif  d'une  profonde  impuissance  phiiosophique." 


NOT  SUSCEPTIBLE  OF  EXACTNESS.  123 

and,  further,  that  this  minimum  is  different  in  different 
nations.  In  China,  it  is  stated  that  profits  show  no  tend 
ency  to  fall  below  30  per  cent,  per  annum;  while  in 
England  profits  have  fallen  perhaps  to  10  per  cent.,  in 
Holland  probably  lower,  and  in  other  countries  the  de 
cline  has  been  arrested  at  other  points.  Now  the  point 
in  the  descent  at  which  the  fall  is  arrested — that  is  to 
say,  the  minimum  rate  of  profit  which  can  for  any  con 
siderable  time  exist  in  any  community — is  determined 
by  the  strength  of  a  principle  which  Mr.  Mill  has  called 
"  the  effective  desire  of  accumulation."  This  "  effective 
desire  of  accumulation"  is  a  general  expression  to  de 
note  the  degree  in  which  a  desire  for  wealth  predomi 
nates  over  those  principles  of  human  nature  which  ob 
struct  its  operation — such  as  the  love  of  ease,  and  the 
desire  for  immediate  enjoyment.  When  a  man  employs 
his  wealth  as  capital  for  the  purpose  of  producing  more 
wealth,  he  is  induced  to  do  this — to  abstain  from  the 
present  enjoyment  of  what  he  has  accumulated,  and  to 
engage  in  the  toils  and  anxieties  of  business — by  the 
prospect  of  adding  to  the  sum-total  of  his  wealth  the 
profit  which  is  to  be  made  by  the  productive  employ 
ment  of  it.  If  lie  had  not  this  prospect  of  profit,  he 
would  not  employ  his  acquired  wealth  for  productive 
purposes  at  all.  He  would  have  no  motive  to  do  so.  He 
would  either  consume  it  as  he  had  need  for  it ;  or,  if  he 
wished  to  reserve  some  for  consumption  in  future  years, 
instead  of  adventuring  it  without  prospect  of  profit  in 
productive  operations,  he  would  convert  it  into  money, 
and  lay  it  by  in  some  secure  place,  from  which  he  could 
withdraw  it  as  occasion  required.  Now,  since  the  pros 
pect  of  profit  is  that  which  induces  a  man  to  overcome 


124       SOLUTION   OF  AN  ECONOMIC  PROBLEM 

his  natural  indolence  and  to  repress  liis  desire  for  imme 
diate  enjoyment,  it  is  evident  that  the  minimum  rate  of 
profit  which  shall  suffice  for  this  purpose  will  depend  on 
the  relation  in  which  the  accumulative  propensity  in  his 
nature  stands  to  the  principles  which  oppose  it — that  is 
to  say,  to  his  love  of  ease  and  inclination  toward  imme 
diate  enjoyment.  The  stronger  relatively  be  the  former 
principle,  the  smaller  will  be  the  prospect  of  gain  ade 
quate  to  induce  him  to  engage  in  the  production  of 
wealth — in  other  words,  the  lower  may  profits  fall  be 
fore  the  decline  will  be  arrested  through  the  absence  of 
sufficient  motive.  The  case,  then,  stands  thus :  Owing  to 
certain  conditions  incident  to  the  character  of  produc 
tive  agents,  there  is  a  tendency  in  profits  to  decline  as 
nations  advance  in  wealth  and  population ;  there  is  also 
a  point  at  which  the  fall  is  arrested,  which  point  is  de 
termined  by  the  strength  of  the  effective  desire  of  accu 
mulation.  All  the  knowledge  we  are  capable  of  attain 
ing  on  the  subject  resolves  itself  into  the  general  fact — 
that  such  tendencies  exist,  and  that  such  results  depend 
on  such  conditions ;  but,  as  we  have  no  means  of  ascer 
taining  the  precise  strength,  positive  or  relative,  of  the 
principles  on  which  the  result  depends — independently 
of  the  manner  in  which  their  operation  is  exhibited  iii 
particular  cases — we  are  unable  to  say  beforehand  at; 
what  point  they  may  be  brought  into  equilibrium :  that 
is  to  say,  we  are  unable  to  say  before  trial  what  may  be 
the  minimum  of  profits  which  is  possible  in  any  given 
community.  Contrast  this  with  the  precision  attainable 
in  physical  science.  When  an  astronomer  speculates  on 
the  course  of  a  comet  through  space,  he  does  not  content 
himself  with  stating  the  broad  fact  that  the  meteor  is 


NOT  SUSCEPTIBLE  OF  EXACTNESS.  125 

under  the  influence  of  certain  antagonistic 'forces — that 
it  tends  to  fly  off  from  the  sun  under  the  influence  of 
the  momentum  with  which  it  is  carried,  but  that  at  a 
point  in  its  career  the  force  of  gravity  will  overcome  this 
momentum,  and  that  at  this  point  its  course  will  be  re 
versed  ;  the  astronomer  not  only  tells  us  this,  but  tells 
us,  further,  the  precise  distance  which  the  comet  must 
travel  before  the  force  of  gravity  overcomes  the  mo 
mentum  with  which  it  moves  so  as  to  arrest  its  outward 
course;  and  he  is  able  to  do  so,  because  he  not  only 
knows,  as  a  general  fact,  that  those  tendencies  represent 
ed  by  the  laws  of  gravitation  and  motion  exist,  but  also 
is  able  to  obtain  an  exact  numerical  expression  for  the 
force  with  which  each  operates — a  degree  of  precision 
which  is  not  attainable  in  the  determination  of  the  prin 
ciples  of  Political  Economy. 

Take  another  example  of  the  uncertainty  which,  ow 
ing  to  this  indefiniteness  in  the  premises,  attaches  itself 
to  the  character  of  the  conclusions  of  economic  science. 

We  know,  as  a  general  rule,  that  human  beings  will 
more  readily  dispense  with  the  luxuries  and  vanities 
than  with  the  necessaries  of  life;  and  we  may  infer 
with  certainty  that,  in  the  absence  of  disturbing  causes, 
a  diminution  in  the  supply  of  the  ordinary  food  of  a 
country  will  be  followed  by  a  greater  proportional  rise 
in  its  price  than  a  corresponding  diminution  in  the  sup 
ply  of  an  article  of  less  imperative  necessity  —  that  a 
diminution,  e.  g.,  of  one  third  in  the  supply  of  wheat  will 
cause  a  greater  rise  in  the  price  of  wheat  than  a  propor 
tional  diminution  in  the  supply  of  silk  will  produce  on 
its  price.  Some  writers,  indeed,  have  attempted  to  go 
beyond  this  general  statement,  and  have  expressed  in  a 


12Q        SOLUTION   OF  AN  ECONOMIC  PROBLEM 

tabulated  form  the  rise  in  the  price  of  food  winch  takes 
place  in  the  event  of  certain  assumed  deficiencies  in  its 
quantity.  Thus,  according  to  the  calculation  of  Greg 
ory  King,  who  lived  in  the  latter  end  of  the  seventeenth 
century,  a  deficiency  of  one  tenth  in  the  ordinary  supply 
of  the  staple  food  will  cause  a  rise  in  its  price  to  the  ex 
tent  of  three  tenths  above  the  ordinary  rate ;  a  deficien 
cy  of  two  tenths  a  rise  of  eight  tenths ;  a  deficiency  of 
three  tenths  a  rise  of  1.6 ;  and  so  on  up  to  a  deficiency 
of  one  half,  which,  it  is  calculated,  will  produce  a  rise  in 
price  equal  to  four-and-a-half  times  the  ordinary  rate.1 
If,  however,  we  consider  for  a  moment  the  causes  on 
which  a  rise  of  price  depends,  and  the  circumstances 
which  determine  its  extent,  it  will  be  evident  that  no  re 
liance  can  be  placed  on  the  accuracy  of  such  calcula 
tions  ;  the  conditions  essential  to  such  accuracy  not  be 
ing  susceptible  of  realization. 

The  rise  which  occurs  in  the  price  of  wheat  in  conse 
quence  of  a  deficiency  in  quantity  will  depend  (the 
amount  of  the  deficiency  being  given)  on  two  conditions 

1  The  following  is  Gregory  King's  table  : 

Defect.  Above  the  common  rate. 

1  tenth  -x  p    3  tenths. 

2  tenths  8  tenths. 

3  tenths  >  raises  the  price  <  1.6. 

4  tenths  2.8. 

5  tenths  J  U.5. 

On  this  Mr. Tooke  remarks:  "It  is  perhaps  superfluous  to  add  that 
no  such  strict  rule  can  be  deduced ;  at  the  same  time  there  is  ground  for 
supposing  that  the  estimation  is  not  very  wide  of  the  truth,  from  observa 
tion  of  the  repeated  occurrence  of  the  fact  that  the  price  of  corn  in  En 
gland  has  risen  from  100  to  200  per  cent,  and  upward,  when  the  utmost 
computed  deficiency  of  the  crops  has  not  been  more  than  between  one 
sixth  and  one  third  below  an  average,  and  when  that  deficiency  has  been 
relieved  by  foreign  supplies." — "  History  of  Prices,"  vol.  i.  p.  13. 


NOT  SUSCEPTIBLE  OF  EXACTNESS.  127 

—1st,  the  disposition  of  the  people  among  whom  the  de 
ficiency  takes  place  to  sacrifice  other  gratifications  which 
it  may  be  in  their  power  to  command  to  the  desire  of 
obtaining  the  usual  quantity  of  their  accustomed  nutri 
ment  ;  and,  2d,  the  extent  of  the  means  at  their  disposal 
for  obtaining  other  kinds  of  gratification — that  is  to  say, 
their  general  purchasing  power.  Kow  if  we  could  ob 
tain  an  exact  measure  of  this  disposition,  as  wTell  as  of 
the  means  of  giving  effect  to  it  at  the  command  of  con 
sumers,  and  knew  also  the  exact  extent  of  the  deficiency 
in  the  supply  of  wheat,  we  might  then  give  a  precise  nu 
merical  statement  of  the  rise  of  price  which  would  take 
place  under  the  assumed  circumstances.  But  it  is  evi 
dent  that  none  of  these  conditions  can  be  accurately  ful 
filled.  Without  dwelling  upon  the  difficulty  of  ascer 
taining  accurately  the  other  data  essential  to  the  solution, 
namely,  the  extent  of  the  purchasing  power  of  a  com 
munity,  and  the  mode  of  its  distribution  among  different 
classes,  it  is  evident  that  the  disposition  of  people  to  sac 
rifice  one  kind  of  gratification  to  another — to  sacrifice 
vanity  to  comfort,  or  decency  to  hunger — is  not  suscep 
tible  of  precise  measurement,  and  can  never,  like  the 
forces  of  physical  nature,  be  brought  within  the  limits 
of  a  formulated  statement. 

This  character  of  indefiniteness  which  belongs  to  the 
premises  of  Political  Economy  is  very  strikingly  exhib 
ited  in  the  effect  which  an  alteration  in  the  duty  on 
taxed  articles  sometimes  produces  on  their  consumption, 
It  is  often  found,  e.  g.,  that  a  reduction  in  the  duty  on 
an  article  of  consumption — say  tobacco — is  followed  by 
an  increase  in  the  total  proceeds  of  the  tax,  but  that  if 
the  reduction  be  continued  further,  the  returns  will  de- 


123        SOLUTION  OF  AN  ECONOMIC  PROBLEM 

cline.  Now  if  the  disposition  and  purchasing  power  of 
the  community  with  regard  to  tobacco,  as  compared 
with  other  articles  of  general  consumption,  were  known, 
and  could  be  accurately  expressed  by  a  mathematical 
formula,  the  precise  point  at  which  the  proceeds  of  a 
tax  upon  tobacco  would  attain  their  maximum  could  be 
determined  beforehand ;  and  an  immense  reform,  with 
out  risk  of  failure,  could  at  once  be  effected  in  our  fiscal 
system.  But  as  we  have  no  means  of  ascertaining  with 
precision  the  disposition  of  mankind,  or  any  portion  of 
them,  in  this  respect,  we  are  obliged  to  have  recourse  to 
a  series  of  tentative  experiments,  and  must  content  our 
selves  with  a  rough  approximation  to  the  required  maxi 
mum,  obtained  perhaps  at  the  cost  of  considerable  loss 
to  the  revenue  and  of  inconvenience  to  the  public. 

I  have  thought  it  well  to  call  attention  to  this  source 
of  imperfection  in  our  economic  reasonings,  as  it  appears 
to  me  desirable  that  we  should  know  the  weakness  as 
well  as  the  strength  of  our  position  as  political  econ 
omists,  that  we  may  not,  by  affecting  an  accuracy  that 
is  unattainable,  bring  suspicion  and  discredit  on  the  un 
doubted  truths  of  the  science. 

The  celebrated  formula  of  Malthus,  as  you  are  aware, 
asserted  that  population  tends  to  increase  in  a  geomet 
rical,  subsistence  in  an  arithmetical  ratio.  In  advancing 
this  statement,  Malthus  really  intended  nothing  more, 
as  every  candid  and  intelligent  reader  of  his  work  will 
at  once  perceive,  than  to  give  definiteness  to  our  concep 
tions  of  an  important  principle ;  the  conclusions  which 
he  based  upon  the  principle  thus  expressed  not  in  the 
least  depending  for  their  truth  on  the  mathematical  ac 
curacy  of  the  formula.  His  opponents,  however,  were 


NOT  SUSCEPTIBLE  OF  EXACTNESS.  129 

not  in  the  humor  for  making  this  allowance.  The  doc 
trine  had  been  stated  in  mathematical  form,  and  it  must, 
therefore,  be  maintained  in  all  its  strictness,  or  the  spec 
ulations  of  Malthus  must  be  forthwith  pronounced  a  de 
lusion,  and  his  conclusions  the  phantasms  of  a  diseased 
imagination. 

§  2.  Such,  then,  being  the  character  of  an  economic 
law,  analogous  in  all  respects  to  those  laws  of  physical 
nature  which  are  obtained  by  a  similar  process  of  de 
ductive  reasoning,  with  the  important  exception  that  it 
does  not  admit  of  quantitative  statement,  we  are  now 
in  a  position  to  understand  how  far  economic  laws  can 
be  made  available  in  the  explanation  of  economic  phe 
nomena. 

The  explanation  of  a  phenomenon,  or  the  solution  of 
a  problem  (the  expressions  being  equivalent),  consists  in 
a  reference  of  the  fact  to  be  solved  or  explained  to  some 
known  or  acknowledged  principles.  The  velocity  of  a 
planet  through  space,  e.  g.,  is  said  to  be  explained  when 
this  velocity  is  shown  to  be  the  result  of  known  dynam 
ical  principles.  The  physical  phenomenon  of  dew  is 
said  to  be  explained  when  it  is  shown  that  the  known 
laws  of  the  radiation  and  conduction  of  heat,  together 
with  the  laws  of  the  condensation  of  watery  vapor,  neces 
sarily  under  certain  external  conditions  lead  to  the  oc 
currence  of  dew;  these  conditions  being  the  same  as 
those  under  which,  in  fact,  dew  is  observed  to  appear. 
If  we  admit  the  existence  of  the  laws,  we  see  that  the 
phenomenon  must  be  present  when,  in  fact,  it  is  present. 
In  the  same  way  the  economic  phenomenon  of  rent  is 
said  to  be  explained  when  it  is  shown  to  be  the  neces- 

F2 


130        SOLUTION  OF  AN  ECONOMIC  PROBLEM 

sary  consequence  of  the  play  of  human  interests  traffick 
ing  in  an  article  having  the  peculiar  physical  properties 
which  are  found  to  reside  in  land.  In  this  case,  also,  if 
we  admit  that  human  beings  in  their  dealings  with  land 
act  with  a  view  to  their  own  interests,  and,  further,  that 
the  best  soils  in  point  of  fertility  and  situation  are  not 
unlimited  in  supply,  and  that  the  yield  to  be  obtained 
from  a  limited  area  is  also  not  unlimited,  but  diminishes 
in  proportion  to  the  outlay,  as  the  quantity  raised  is  in 
creased,  we  see — or  by  reasoning  on  these  facts  we  may 
see — that  the  phenomenon  of  rent  must  present  itself  in 
the  progress  of  society,  and  that  it  will  rise  and  fall 
from  those  causes  which  we  find  in  fact  to  affect  it.  So 
far,  the  solution  of  an  economic  problem  is  strictly  anal 
ogous  to  that  of  a  physical  problem ;  in  each  case  the 
process  consists  in  tracing  back  the  fact  to  be  explained 
to  its  source  in  the  ultimate  principles  of  the  science ; 
if  it  be  a  physical  fact,  to  the  ultimate  laws  of  physical 
nature ;  if  an  economic  fact,  to  the  ultimate  axioms  of 
Political  Economy — that  is  to  say,  to  the  mental  and 
physical  principles  from  which  its  doctrines  are  de 
rived.  Until  this  connection  is  clearly  established,  no 
physical  or  economic  phenomenon  can  be  said  to  be 
explained. 

The  solution  of  a  problem  may  be  regarded  as  perfect 
when  the  principles  to  which  it  is  referred  are  shown  to 
exist,  and  to  lead  by  necessary  consequence  to  the  pre 
cise  fact  which  constitutes  the  problem  to  be  solved.1 

1  "In  such  a  case,"  says  Sir  John  Herschel,  "when  we  reason  upward 
till  we  reach  an  ultimate  fact,  we  regard  a  phenomenon  as  fully  explained ; 
as  we  consider  the  branch  of  a  tree  to  terminate  when  traced  to  its  inser 
tion  in  the  trunk,  or  a  twig  to  its  junction  in  the  branch  ;  or,  rather,  as  a 


NOT  SUSCEPTIBLE   OF  EXACTNESS. 

Supposing  our  reasoning  to  be  correct,  it  is  evident  that 
imperfection  may  yet  arise  either  from  the  indefmiteness 
of  our  knowledge  of  the  laws  which  operate  in  produc 
ing  the  phenomenon,  or  from  ignorance  of  the  precise 
circumstances  under  which  they  come  into  operation. 
pVith  the  exception,  perhaps,  of  astronomy,  there  is  no 
[science  that  has  attained  absolute  perfection  in  both 
[these  respects.  Most  of  the  advanced  physical  sciences, 
however,  satisfy  the  first  condition,  though  they  gener 
ally  fail  of  complete  accuracy  in  the  latter.  To  revert 
to  a  former  example — the  formation  of  dew — the  laws 
of  the  radiation  and  conduction  of  heat  and  of  the  con 
densation  of  watery  vapor  on  which  that  phenomenon 
depends  may  be  accurately  ascertained  and  expressed 
in  mathematical  formulae  ;  but  the  circumstances  under 
which  the  phenomenon  appears — the  state  of  the  atmos 
phere,  and  the  condition  of  the  various  bodies  on  which 
the  deposition  of  dew  takes  place  during  any  given 
night  —  can  not  be  accurately  ascertained.  I^ow,  while 
this  is  so,  the  solution  of  the  problem  is  not  complete ; 
since,  although  we  may  perceive  from  our  knowledge  of 
the  laws  of  heat  and  of  aqueous  vapor  that  dew  under 
the  actual  circumstances  must  appear,  yet,  from  want  of 
precision  in  our  knowledge  as  to  what  the  actual  circum 
stances  are,  we  can  not  tell  the  precise  quantity  that 
ought,  in  obedience  to  these  laws,  to  be  deposited ;  and, 
therefore,  can  not  be  certain  that  our  solution  may  not 


rivulet  retains  its  importance  and  its  name  till  lost  in  some  larger  tributa 
ry,  or  in  the  main  river  which  delivers  it  to  the  ocean.  This,  however, 
always  supposes  that,  on  a  reconsideration  of  the  case,  we  see  clearly  how 
the  admission  of  such  a  fact,  with  all  its  attendant  laws,  will  perfectly  ac 
count  for  every  particular." — "  Natural  Philosophy,"  p.  1G3. 


132        SOLUTION  OF  AN  ECONOMIC  PROBLEM 

be  more  or  less  than  adequate ;  nor  whether  there  may 
not  be  other  causes  affecting  the  result  which  we  have 
omitted  to  notice. 

In  Political  Economy  we  have  seen  that  the  laws 
which  it  announces  do  not  admit  of  precise  quantitative 
statement:  we  have  now  further  to  note  that  the  re 
maining  portion  of  the  data  necessary  to  the  solution 
of  a  given  problem,  namely,  the  circumstances  under 
which  they  come  into  operation,  though  generally  sus 
ceptible  of  measurement  could  they  be  ascertained,  yet 
in  practice  can  seldom  be  ascertained  so  completely  as 
to  admit  of  being  stated  numerically. 

Take,  e.  g.,  an  economic  phenomenon  which  has  ex 
cited  much  speculation  lately  among  economists  and 
commercial  men  —  the  export  of  silver  from  Europe  to 
the  East,  which  has  been  proceeding  on  an  extraordina 
ry  scale  during  the  last  year  (1856).  Many  causes  may 
be  assigned,  which,  taken  together,  will  go  a  certain  way 
in  accounting  for  this  fact.  There  has  been,  in  the  first 
place,  a  general  rise  of  wages  in  the  United  Kingdom— 
the  consequence  partly  of  our  general  commercial  pros 
perity,  partly  of  the  gold  discoveries — leading  to  an  in 
creased  money  demand  here  for  the  productions  of  East 
ern  countries.  There  has  been,  in  the  next  place,  a  fail 
ure  in  the  silk  crop  on  the  Continent,  obliging  Europeans 
to  obtain  a  large  portion  of  their  silk  from  India  and 
China,  and  thus  increasing  the  liabilities  of  Europe  in 
those  quarters.  The  interruption  of  our  trade  during 
the  Russian  war,  again,  has  obliged  us  to  resort  to  the 
same  quarters  for  linseed  and  other  articles  which  we 
usually  procure  from  Russian  sources ;  leading  to  a  fur 
ther  augmentation  of  our  liabilities  in  the  East.  There 


NOT  SUSCEPTIBLE  OF  EXACTNESS.  133 

is  then  a  Chinese  rebellion,  tending  to  increase  the  pas 
sion  for  hoarding  so  prevalent  in  Oriental  countries.  In 
addition  to  all  these  causes,  there  are  the  new  supplies 
of  gold  from  California  and  Australia,  lowering  its  value 
in  relation  to  silver,  displacing  thereby  the  latter  metal 
from  the  circulation  of  countries  which  have  a  double 
standard  (such  countries  being  principally  confined  to 
the  continent  of  Europe),  and  thus,  by  lessening  the  de 
mand  for,  lowering  the  value  of,  silver.  Having  regard 
to  these  different  circumstances,  and  to  the  play  of  hu 
man  interests  in  the  pursuit  of  wealth  to  which  they 
give  occasion,  it  may  be  easily  shown  that  the  export  of 
silver  from  Europe  to  the  East  (unless  counteracted  by 
some  other  causes  of  equal  efficacy  in  an  opposite  direc 
tion)  must  take  place  as  a  necessary  consequence ;  and, 
taking  them  altogether,  and  the  scale  of  their  magni 
tude  as  far  as  it  can  be  ascertained,  they  probably  go  far 
to  explain  the  existing  drain.  But  are  they  adequate  to 
a  complete  explanation  ?  or  are  they  more  than  ade 
quate?  and  is  it,  therefore,  necessary  to  look  out  for 
some  cause  acting  in  an  opposite  direction,  in  order  to  a 
complete  explanation  of  the  result  which  we  witness  ? 

Or,  take  another  example  —  the  high  price  of  corn 
during  the  last  four  years  (1853  to  1856  inclusive). 
Among  the  causes  which  have  been  assigned  in  explana 
tion  of  this  phenomenon  is  the  fall  which  has  recently 
taken  place  in  the  value  of  gold,  the  effect  of  the  large 
influx  from  Australia  and  California.  Some  .writers, 
however,  who  are  of  opinion  that  gold  has  not  fallen  in 
value,  maintain  that  the  high  range  of  price  is  sufficient 
ly  accounted  for  by  the  shortness  of  supplies  consequent 
upon  the  great  deficiency  of  the  harvest  of  1853  over 


134:        SOLUTION  OF  AN  ECONOMIC  PROBLEM 

the  whole  of  Europe,  in  conjunction  with  our  exclusion 
from  some  of  the  usual  sources  of  supply  during  the 
Russian  war ;  and  this  notwithstanding  the  influence  of 
free  trade  operating  powerfully  in  the  opposite  direc 
tion.  Now,  if  Political  Economy  were  an  exact  science, 
this  question  could  be  at  once  determined  by  calculating 
the  effect  of  the  causes  assigned,  and  comparing  the  re 
sult  of  the  calculation  with  the  actual  market  price. 
But,  for  the  reasons  I  have  explained,  such  a  calculation 
transcends  its  resources ;  for  even  though  it  were  possi 
ble  to  obtain  accurate  and  trustworthy  statistics  of  the 
production  and  importation  of  corn  during  the  period 
in  question,  we  should  yet  be  unable  to  say  what  effect 
this  would  produce  on  price,  from  the  essential  indefi- 
niteness  of  the  other  premises  involved  in  the  problem 
— the  relative  strength  of  human  desires,  the  extent  of 
the  means  at  the  disposal  of  consumers,  not  to  mention 
the  various  circumstances  influencing  opinion  as  to  the 
prospects  of  the  coming  crop,  such  as  the  changes  in  the 
weather  and  the  reports  of  the  harvests  from  other 
countries.1  We  are,  consequently,  in  arguing  this  ques 
tion,  obliged  to  have  recourse  to  arguments  of  a  proba 
ble,  and  often  of  a  conjectural  nature,  the  conclusions 
from  which  must,  of  course,  partake  of  the  same  merely 
probable  and  conjectural  character,  and  can,  therefore, 
never  attain  to  that  precise  and  definite  form  which  dis 
tinguishes  the  conclusions  of  physical  science. 

§  3. 1  have  dwelt  thus  at  some  length  on  the  char 
acter  of  an  economic  problem,  and  the  degree  of  per- 

1  See  Tooke's  "  History  of  Prices,"  vol.  v.  part  i.  sec.  29,  in  which  the 
question  is  very  fully  and  very  satisfactorily  discussed. 


NOT  SUSCEPTIBLE   OF  EXACTNESS.  135 

fection  of  which  its  solution  is  susceptible,  because  it 
appears  to  me  that,  among  those  who  in  the  public 
press  and  elsewhere  engage  in  economic  discussions, 
there  are  few  who  seem  to  have  any  clear  conception 
of  what  it  is  wrhich,  in  the  investigation  of  the  phenom 
ena  of  wealth,  Political  Economy  proposes  to  accom 
plish.  The  following  very  just  observations,  taken  from 
a  paper  in  the  Statistical  Journal  of  October  last  by 
my  immediate  predecessor,  Mr.  Walsh,  on  the  export 
of  silver  to  the  East,  will  illustrate  the  confusion  of 
ideas  to  which  I  have  adverted  :  "  There  is  a  mode  in 
which  some  persons  deceive  themselves  into  the  belief 
that  they  are  accounting  for  this  phenomenon,  which 
calls  for  our  consideration.  I  have  seen  it  put  forward 
by  persons  signing  themselves  '  China  Merchants,'  i  East 
ern  Merchants,'  and  the  like  —  names  which  seem  to 
claim  authority  for  the  bearers  in  a  question  relating 
to  a  trade  with  which  they  are  conversant.  They  state 
what  is  occurring,  and  then  imagine  they  have  told  us 
why  ;  while,  in  fact,  all  their  labor  ends  in  telling  us 
silver  is  exported  to  the  East,  because  silver  is  exported 
to  the  East.  One  announces  (in  a  letter  to  the  Econo 
mist^  February  2,  1856)  that  the  direct  answer  to  the 
question  as  to  the  cause  of  the  export  of  silver  is  that 
the  metal  presents  just  now  the  most  lucrative  branch 
of  commerce ;  and  he  rejects  any  speculations  that  aim 
at  offering  further  explanation.  The  answer  is  quite 
correct,  but  as  trifling  as  true.  If  the  trade  were  not 
lucrative,  no  one  would  continue  to  carry  it  on  ;  but 
the  question  is,  what  makes  it  unusually  lucrative  ?  and 
on  that  subject  the  writer  does  not  inform  us.  Others 
wander  into  long  descriptions  of  the  machinery  by 


136        SOLUTION  OF  AN  ECONOMIC  PROBLEM 

which  the  transmission  of  silver  is  effected — bills  drawn 
on  this  place  for  debts  due  elsewhere ;  and  goods  sent 
to  one  locality  in  return  for  what  is  transmitted  to  some 
other ;  and  finally  flatter  themselves  they  have  told  us 
why,  when  they  have  merely  mentioned  how.  Why  is 
snch  a  one  crossing  the  ferry  ?  Because  he  is  carried  in 
the  boat.  But  why  did  he  get  into  the  boat  ?  That  is 
the  question  to  be  answered.  And  so,  in  like  manner,  it 
is  no  answer  to  the  question  why  silver  is  exported  to 
the  East,  to  state  the  channels  and  appliances  by  which 
it  is  transmitted.  "What  is  really  required  to  be  known 
is  not  the  machinery  of  transfer,  but  what  set  that  ma 
chinery  in  motion:"  in  other  words,  what 'those  phys 
ical  facts  or  events  are,  which,  in  conjunction  with  the 
self-interest  of  men  operating  in  the  pursuit  of  wealth, 
produce  the  actual  result — the  drain  of  silver. 

Every  one,  I  suppose,  has  met  with  antagonists  who, 
when  hard  pressed  with  an  economic  difficulty,  have 
taken  refuse  in  the  convenient  maxim  that "  in  the  end 

O 

things  will  find  their  level " — an  explanation  which 
does  not  leave  upon  the  mind  a  very  definite  notion  of 
the  means  by  which  the  desiderated  level  is  to  be  at 
tained.  A  writer  in  the  Examiner1  turns  to  almost 
equal  account  the  words  "  stimulate "  and  "  absorb," 
making  them  available  in  the  support  of  some  very  ex 
traordinary  doctrines.  Among  other  paradoxes,  this 
writer  maintains  that  not  only  has  gold  not  fallen  in 
value  in  consequence  of  the  recent  discoveries,  but  that 
it  has  never  fallen  in  consequence  of  former  discover 
ies  ;  and  not  only  this,  but  that  there  is  nothing  in  the 

1  December  13,  185G. 


NOT  SUSCEPTIBLE   OF  EXACTNESS. 

cheapened  cost  of  producing  gold  which  tends  to  lower 
its  value.  Having  assumed  (in  disregard  of  such  sta 
tistics  as  he  gives)  that  the  increased  production  of  gold 
has  hitherto  had  no  effect  upon  prices,  the  writer  thus 
proceeds  to  account  for  the  fact :  "  The  additional 
supply  of  the  precious  metals  has  stimulated  the  indus 
try  of  the  world,  and  in  fact  produced  an  amount  of 
wealth,  in  representing  which  they  have  been  them 
selves,  as  it  were,  absorbed."  Further  on  he  says: 
"But  the  produce  of  Australian  and  Californian  gold, 
as  well  as  that  of  silver  which  has  accompanied  it,1 

1  As  if  in  compensation  for  the  prevalent  disposition  to  rest  economic 
principles  on  statistical  data,  the  writer  in  the  Examiner  reverses  the 
process,  and  endeavors  to  deduce  from  economic  principles  (or  what  he 
takes  for  them)  matters  of  Tact  which  are  capable  of  being  proved  by 
statistical  evidence.  In  this  way,  in  the  article  from  which  I  have 
quoted,  he  attempts  to  prove  that  the  stock  of  silver  in  the  world  has, 
since  the  Australian  and  Californian  discoveries,  been  increased  by  an 
amount  equal  to  £118,750,000.  The  following  is  his  argument : 

The  increase  of  gold  he  takes  during  the  last  nine  years  as  £125,000,000 ; 
but  silver  in  relation  to  gold  has  during  that  interval  risen  only  5  per 
cent.  ;  therefore  the  stock  of  silver  has  increased  by  the  same  amount 
(viz.,  £125,000,000)  minus  5  per  cent.,  or  £118,750,000  ;  adding,  in  fur 
ther  explanation,  that  the  rise  in  the  price  of  silver  would  "act  as  a 
premium  on  its  production." 

It  is  evident  that  the  suppressed  premise  of  this  argument  is,  that  the 
relative  quantities  of  the  two  metals  vary  always  directly  as  their. values  ; 
but  on  this  assumption  the  increase  in  the  stock  of  silver  would  be  very 
much  greater  than  the  Examiner  makes  it  out ;  since,  according  to  all 
estimates  on  the  subject,  the  stock  of  silver  in  existence  in  1848,  when 
the  Californian  discoveries  took  place,  was  at  least  one  half  greater 
than  that  of  gold.  If,  then,  the  correspondence  in  their  values  indicates 
a  like  correspondence  in  their  relative  quantities,  instead  of  an  addition 
of  £118,750,000  to  the  stock  of  silver  previously  existing,  we  should 
have  an  addition  cf  £178,125,000,  or  an  average  annual  production  of 
silver  since  1848  of  about  £22,000,000. 

But,  in  the  next  place,  the  assumption  of  a  constant  connection  between 
the  quantity  and  the  value  of  the  precious  metals  is  directly  at  variance 
with  the  doctrine  which  it  is  the  object  of  the  article  to  establish— name- 


138        SOLUTION  OF  AN  ECONOMIC  PROBLEM 

is  likely  to  go  on,  and  it  may  be  asked  if  this  must  not 
in  course  of  time  produce  depreciation.  We  think  it 
certainly  is  not  likely  to  do  so.  ...  On  the  contrary, 
it  will  surely  be  absorbed  by  increasing  wealth  and  pop 
ulation  as  fast  as  it  is  produced." 

It  is  strange  that  the  obvious  reductio  ad  absurdum 
should  not  have  restrained  such  speculations.  The  the 
ory  applies  to  every  conceivable  augmentation  of  gold. 


ly,  that  an  increased  production  of  gold  has  no  tendency  to  affect  its 
value.  The  writer  starts  by  assuming  that  the  value  of  silver  must  be 
regulated  by  its  quantity,  and  then  proceeds  to  prove  that  the  quantity 
of  gold  can  have  no  influence  on  its  value.  Gold,  we  are  told,  has  not 
fallen  in  value,  notwithstanding  the  increase  in  its  quantity,  and  then 
it  is  argued  that  silver  must  have  increased  in  quantity  pari  passu  with 
gold,  or  else  its  value  would  not  have  fallen  with  the  value  of  gold. 

Had  the  writer  taken  the  trouble  to  refer  to  the  statistics  which  are 
available  on  the  subject,  he  would  perhaps  have  seen  reason  to  doubt 
the  soundness  of  his  economic  views.  If  the  reader  will  turn  to  the 
sixth  volume  of  Tooke's  "History  of  Prices,"  Appendix  XXVI.,  he 
will  find  returns  of  the  importation  of  silver  from  the  various  produc 
ing  countries  during  the  last  eight  years,  and  estimates  from  these  and 
other  sources  of  the  total  annual  production  during  the  same  time,  in 
a  compendious  and  convenient  form.  From  these  it  appears  that  the 
annual  production  of  silver,  which,  according  to  M.  Chevalier's  estimate, 
was  £8,720,000  in  1848,  will,  in  the  opinion  of  Mr.  Newmarch,  based 
upon  the  statistics  which  he  has  given,  have  risen  to  about  £12,000,000 
for  the  present  year— being  equivalent  to  an  increase  of  about  37  per 
cent,  on  the  previous  annual  supply  ;  the  annual  supply  of  gold  during 
the  same  period  having  increased  by  about  300  per  cent. 

There  seems  indeed  every  reason  to  suppose,  from  the  facts  stated  by 
M.  de  Humboldt  and  M.  Chevalier,  in  their  treatises  on  the  Production 
of  the  Precious  Metals,  respecting  the  silver  mines  in  Mexico  and  Peru 
still  unworked,  as  well  as  from  the  recent  discoveries  of  quicksilver  in 
California,  cheapening  as  it  will  so  considerably  the  cost  of  producing 
silver,  that  the  production  of  silver  will  be  rapidly  extended,  and  that 
thus  the  depreciation  now  going  forward  in  the  value  of  gold  will  be 
concealed  by  the  contemporaneous  depreciation  in  the  value  of  that  met 
al  with  which  it  is  most  usual  to  compare  it.  As  to  the  rise  in  the  price 
of  silver  "  acting  as  a  premium  on  its  production,"  this  is  merely  the  com 
mon  fallacy  of  confounding  price  and  value. 


NOT  SUSCEPTIBLE  OF  EXACTNESS. 

The  stimulus  is  represented  as  in  proportion  to  the  in 
crease  of  supply.  Consequently,  however  great  the  in 
crease,  in  the  same  degree  will  be  the  stimulus — in  the 
same  degree,  therefore,  the  amount  of  wealth  produced, 
and,  as  in  representing  this  the  gold  is  absorbed,  in  the 
same  degree  the  absorption.  According  to  this  theory, 
then,  if  gold  were  produced  in  such  quantities  as  to  be 
as  abundant  as  copper — nay,  if  it  were  as  common  as 
the  sand  on  the  sea-shore,  it  would  nevertheless  be  as 
valuable  as  ever,  and  a  given  quantity  of  gold  would 
still  command  the  same  quantity  of  all  other  things. 

It  is  to  be  regretted  that  the  writer  did  not  favor  us 
with  his  notion  of  the  manner  in  which  the  alleged 
"  stimulus  "  to  industry  operates,  and  the  supposed  "  ab 
sorption  "  is  effected.  The  stimulus,  it  seems,  is  not 
felt,  according  to  the  popular  view,  in  a  rise  of  price ; 
for  this,  he  asserts,  the  new  gold  has  no  tendency  to 
produce :  nor  does  it  take  place  through  an  increase 
of  demand,  for  this  could  only  manifest  itself  through 
a  rise  of  price ;  nor  does  it  operate  through  a  fall  in 
the  rate  of  interest,  for  it  is  notorious  that  during  re 
cent  years  the  rate  of  interest  has  been  high ;  while, 
with  regard  to  the  modus  operandl  of  "absorption," 
we  are  equally  left  in  ignorance.1 

1  As  another  example  of  the  kind  of  "solutions"  with  which  writers 
on  economic  questions  satisfy  themselves,  take  the  following  from  the 
Economist,  June  20th,  1857,  p.  682.  The  writer  is  explaining  the  prin 
ciples  which  regulate  the  distribution  of  the  precious  metals:  "From 
the  beginning  of  society,  and  in  all  countries,  gold  and  silver  have  been 
used  as  money.  They  are,  in  fact,  by  some  writers  called  natural  money. 
If  this  be  a  true  description  of  them,  they  must  be  distributed  by  natural 
laws,  and  one  nation  can  not  have  more  of  them  than  another,  any  more 
than  one  man  can  have  more  atmospherical  air  than  another.  Europe, 
generally,  is  in  a  state  of  civilization  which  makes  gold  the  most  conven- 


140        SOLUTION  OF  AN  ECONOMIC  PROBLEM 

Such  attempts  at  an  explanation  of  economic  phe 
nomena  remind  us  of  some  of  the  physical  speculations 

ient  metal  for  its  coin ;  Asia,  generally,  is  in  a  state  of  civilization  which 
makes  silver  the  most  convenient  metal  for  its  coin.  Europe  can  not  pos 
sibly  have  all  the  gold  and  all  the  silver  too.  Gluttonous  as  it  may  be — 
led  astray  as  its  inhabitants  still  may  be  by  the  old  theories  of  wealth — 
the  desire  to  keep  for  itself  all  the  gold  and  silver  that  Providence  sends 
for  all  the  nations  of  the  earth  can  not  possibly  be  gratified  ;  and  so  we 
see  the  large  new  supplies  of  the  precious  metals  pretty  fairly  distributed 
over  all.  Gold  comes  from  America  and  Australia  into  Europe  ;  and 
silver,  displaced  by  it,  goes  from  Europe  to  Asia,  to  India  and  China, 
spreading  natural  money  every  where.  So,  by  the  bounty  of  Providence, 
the  useful  instruments  of  life  in  society  are  distributed  by  two  streams 
running  in  different  directions  over  all  the  earth.  Man  is  the  agent  for 
making  the  distribution,  but  he  is  not  conscious  of  all  the  effects  he  pro 
duces." 

Observe  the  reasoning  in  this  passage :  Gold  and  silver  have  in  all 
countries  been  used  as  money ;  they  have  been  called  natural  money ; 
therefore  (assuming  the  designation  as  correct,  which  the  writer  does)  they 
must  be  distributed  by  natural  laws ;  and  therefore  one  nation  can  not 
have  more  of  them  than  another.  Now,  in  the  first  place,  whether  gold 
and  silver  be  distributed  according  to  "natural  laws,"  can  not  in  the  least 
depend  upon  whether  they  have  been  properly  called  "  na^iral  money." 
Paper  credit,  e.  g.,  has  never  been  called  "natural  money,"  nevertheless 
it  is  governed  by  natural  laws  as  certainly  as  gold  and  silver ;  if  it  were 
not  so,  the  attempt  to  regulate  the  paper  currency  would  be  an  absurdity. 
Jt  is  only  in  so  far  as  things  are  governed  by  natural  laws  known  to  us — 
that  is  to  say,  it  is  only  in  so  far  as  we  know  that  certain  effects  will  fol 
low  from  certain  causes — that  we  can  hope  to  control  them. 

But,  secondly,  it  is  argued  that,  because  gold  and  silver  are  distributed 
by  natural  laws,  therefore  "one  nation  can  not  have  more  of  them  than 
another,  any  more  than  one  man  can  have  more  atmospherical  air  than 
another."  In  the  first  place,  it  is  not  easy  to  see  what  the  connection  is 
between  "natural  laws"  and  equal  distribution  of  the  commodities  which 
are  subject  to  these  laws ;  but,  secondly,  it  is  not  true  that  one  nation  has 
no  more  of  the  precious  metals  than  another ;  indeed,  it  is  so  palpably  un 
true,  that  it  is  scarcely  possible  to  believe  that  the  writer  could  have  meant 
what  he  so  distinctly  asserts.  What,  then,  does  he  mean  by  saying  that 
one  nation  can  not  have  more  of  the  precious  metals  than  another?  Does 
he  mean  that  the  share  of  each  is  in  proportion  to  its  population  ?  or  in 
proportion  to  its  trade  ?  In  neither  of  these  senses  is  the  doctrine  more 
true  than  in  the  former.  The  trade  of  England  is  far  greater  than  that 
of  Erance,  but  the  quantity  of  the  precious  metals  in  France  is  greater 


XOT  SUSCEPTIBLE  OF  EXACTNESS. 

of  the  schoolmen.  Dr.  Whewell  mentions  a  doctrine 
maintained  by  these  philosophers  that  a  vessel  full  of 
ashes  would  contain  as  much  water  as  an  empty  vessel. 


than  in  England ;  and  the  quantity  in  India,  in  proportion  to  its  trade,  is 
immeasurably  greater  than  in  either  England  or  France.  Neither  is  the 
relation  of  the  precious  metals  to  population  more  constant  than  in  their 
relation  to  trade.  Will  it  be  said  that  what  is  intended  is  that  the  pre 
cious  metals  are  distributed  among  the  different  nations  of  the  world  in 
proportion  to  their  requirements  for  them?  This  is  true;  but  to  give  this 
as  an  explanation  of  the  principle  according  to  which  the  distribution 
takes  place  is  to  show  that  the  writer  does  not  understand  in  what  con 
sists  the  solution  of  an  economic  problem.  To  adopt  his  own  illustration, 
it  is  just  as  if  a  person,  when  asked  according  to  what  principle  the  air  is 
distributed  around  the  globe,  should  reply,  according  to  the  degree  of  press 
ure  operating  upon  it.  "What  we  want  to  know  is,  in  the  one  case,  ichat 
the  conditions  are  which  produce  the  pressure  on  which  the  dispersion  of 
the  atmosphere  depends  ;  and,  in  the  other,  what  those  requirements  are 
which  determine  the  distribution  of  the  precious  metals — we  want  to  know, 
in  short,  what  principles  of  human  nature  they  are  which,  operating  upon 
what  external  facts,  produce  the  result  which  we  see. 

So  far  with  regard  to  the  precious  inetals  generally ;  next,  with  regard 
to  the  metals  severally,  we  are  told  that  silver  goes  to  Asia,  while  gold 
remains  in  Europe,  because  "Europe  is  in  a  state  of  civilization  which 
makes  gold  the  most  convenient  metal  for  its  coin,  while  Asia  is  in  a 
state  of  civilization  which  makes  silver  the  most  convenient  metal  for  its 
coin."  Now  it  is  certain  that  no  important  change  has  taken  place  in  the 
relative  civilization  of  Europe  and  Asia,  and  I  may  add,  of  America,  dur 
ing  the  last  ten  years.  If  the  principle,  then,  were  a  good  one,  silver  would 
have  been  displaced  in  Europe  long  ago ;  and  inasmuch  as  "the  civiliza 
tion  "  of  America  has  been  equally  in  advance  of  Oriental  nations,  silver 
would  never  have  been  the  chief  currency  there.  But  silver  has  been  the 
principal  currency  in  both  France  and  America  until  recently,  and  might 
be  so  still  in  spite  of  their  "civilization,"  were  their  mint  regulations 
framed  with  a  view  to  retaining  it. 

Had  the  writer  of  this  passage  a  clear  conception  of  what  it  is  which 
Political  Economy  proposes  to  accomplish,  the  tracing  of  the  phenomena 
of  wealth  up  to  definite  human  motives  and  ascertained  external  facts,  he 
would  scarcely  have  satisfied  himself  with  such  an  explanation  as  I  have 
quoted — an  explanation  which,  in  the  vagueness  of  its  phraseology  and 
the  looseness  of  its  reasoning,  is  much  more  allied  to  the  puerile  conceits 
and  verbal  quibbles  of  the  schoolmen,  than  to  the  rigor  and  precision  of 
thought  which  modern  science  demands. 


142        SOLUTION  OF  AN  ECONOMIC  PROBLEM. 

The  mysterious  capacity  of  "  absorption,"  which  in  this 
case  was  attributed  to  the  ashes,  is  by  the  political  econ 
omist  of  the  Examiner  attributed  to  wealth  and  popu 
lation. 

Whether  in  Political  Economy  or  in  physical  science, 
before  proceeding  to  account  for  a  phenomenon,  it  is 
.well  to  ascertain  the  fact  of  its  existence.  This  prelim 
inary  point  being  settled,  the  problem  is  to  be  solved, 
not  by  vague  phrases  and  wholesale  assumptions,  but  by 
connecting  the  phenomenon  to  be  accounted  for  with 
the  ultimate  principles  of  the  science  to  which  it  be 
longs  ;  and,  in  the  case  of  Political  Economy,  these  are 
certain  known  propensities  of  human  nature  and  certain 
ascertained  facts  of  the  external  world. 


LECTUKE  VI. 

OF  THE  PLACE  AND  PURPOSE   OF  DEFINITION  IN 
POLITICAL  ECONOMY. 

§  1.  THE  present  will  be  a  convenient  occasion  on 
which  to  offer  some  remarks  on  the  place  and  purpose 
of  Definition  in  Political  Economy.  In  it,  as  in  all  sci 
entific  undertakings  comprising  in  their  purview  facts 
and  objects  of  much  variety,  an  arrangement  of  such 
facts  and  objects  in  classes  according  to  the  relations 
and  affinities  which,  estimated  with  reference  to  the 
ends  of  the  particular  inquiry,  happen  to  be  most  im 
portant,  forms  an  indispensable  help  in  the  task  of  in 
vestigation  ;  and,  the  phenomena  having  been  classed, 
the  separate  groups  need  to  be  marked  by  distinct 
names.  In  these  two  operations  consists  the  process  of 
defining  in  positive  science.  Of  the  two,  it  need  scarce 
ly  be  said,  the  former,  classification,  is  incomparably  the 
more  important,  as  it  is  also  very  much  the  more  difficult 
operation.  As  has  just  been  intimated,  the  problem  it 
involves  is  to  arrange  the  phenomena  comprised  in  the 
particular  investigation  according  to  the  relations  and 
affinities  most  important  with  reference  to  the  purpose 
in  hand.  A  difficulty,  however,  meets  us  here  at  the 
threshold.  For,  in  order  to  do  this,  a  knowledge  of  such 
relations  and  affinities,  and  of  their  comparative  impor 
tance  in  the  inquiry,  is  plainly  indispensable.  But  this 


144          THE  PLACE  AND  PURPOSE 

is  just  what  a  student  of  nature — it  matters  not  \vliat 
may  be  the  department  of  inquiry — can  not  possibly  at 
the  outset  of  his  enterprise  possess.  "What,  then,  is  to  be 
done  ?  Simply  what  the  circumstances  of  the  case  pre 
scribe — adopt  some  rough  provisional  arrangement  such 
as,  regard  being  had  to  the  end  and  purpose  of  the  in 
quiry,  the  superficial  appearances  of  things  suggest ;  and 
then,  as  in  the  course  of  investigation  new  relations  are 
brought  to  light  and  more  important  distinctions  dis 
close  themselves,  employ  the  larger  knowledge  thus  ob 
tained  to  correct  and  amend  the  original  draught.  These 
being  the  necessary  conditions  under  which  every  new 
inquiry  must  be  conducted,  it  follows  that  classification, 
except  by  the  merest  accident,  can  not  in  the  early  stages 
of  a  positive  science  be  otherwise  than  extremely  imper 
fect  ;  and,  secondly,  that  the  students  of  such  a  science 
must  be  prepared  for  the  necessity  of  constantly  modif}T- 
ing  their  classifications  and,  by  consequence,  their  defi 
nitions  with  the  advance  of  their  knowledge,  in  order  to 
bring  them  into  correspondence  with  the  larger  views 
and  more  exact  ideas  which  this  advance  involves;  nor 
can  they  ever  be  sure  that  their  arrangements  are  defin 
itive,  so  long  at  least  as  their  science  stops  short  of  abso 
lute  perfection. 

§  2.  "Nomenclature,  in  a  systematic  point  of  view,"  says 
Sir  John  Herschel  (pp.  138, 139),"  is  as  much,  perhaps  more, 
a  consequence  than  a  cause  of  extended  knowledge.  Any 
one  may  give  an  arbitrary  name  to  a  thing,  merely  to  be 
able  to  talk  of  it;  but  to  give  a  name  which  shall  at  once 
refer  it  to  a  place  in  a  system,  we  must  know  its  proper 
ties;  and  we  must  have  a  system  laro;e  enough  and  re"1- 

'  •'^OO 

ular  enough  to  receive  it  in  a  place  which  belongs  to  it, 
and  to  no  other.  It  appears,  therefore,  doubtful  whether 


OF  DEFINITION.  145 

it  is  desirable,  for  the  essential  purposes  of  science,  that 
extreme  refinement  in  systematic  nomenclature  should  be 
insisted  on.  Were  science  perfect,  indeed,  systems  of  clas 
sification  might  be  agreed  on,  which  should  assign  to  ev 
ery  object  in  nature  a  place  in  some  class,  to  which  it  more 
remarkably  and  pre-eminently  belonged  than  to  any  other, 
and  under  which  it  might  acquire  a  name,  never  afterward 
subject  to  change.  But,  so  long  as  this  is  not  the  case, 
and  new  relations  are  daily  discovered,  we  must  be  very 
cautious  how  we  insist  strongly  on  the  establishment  and 
extension  of  classes  which  have  in  them  any  thing  artifi 
cial  as  a  basis  of  a  rigid  nomenclature;  and  especially  how 
we  mistake  the  means  for  the  end,  and  sacrifice  conven 
ience  and  distinctness  to  a  rage  for  arrangement." 

Now  all  this  is  quite  as  applicable  to  Political  Econ 
omy  as  to  any  physical  science.  The  first  inquirers  into 
the  laws  of  the  production  and  distribution  of  wealth 
could  not  know  at  the  outset  of  their  inquiries  what  ar 
rangement  of  the  facts  and  objects  forming  the  subject- 
matter  of  their  problem  would  best  conduce  toward  its 
solution.  They  could  only  therefore  adopt  that  arrange 
ment  which  was  at  the  moment  most  promising,  and  tins, 
previous  to  the  scientific  investigation  of  the  phenom 
ena,  would  naturally  be  the  very  classifications  which 
popular  discussions  on  political  and  social  affairs  had 
rendered  familiar.  But  as  investigation  proceeded,  and 
the  more  fundamental  relations  of  things  under  their 
economical  aspect  were  brought  to  light,  the  necessity 
for  new  arrangements  of  the  phenomena,  and  a  corre 
sponding  modification  of  economic  language,  would  be 
come  apparent;  and  thus  economic  terms  would  come 
to  be  employed  in  senses  sometimes  narrower,  sometimes 
more  extended,  than  the  popular  use.  It  is  manifest 
from  this  that  great  elaboration  of  definitions,  at  all 

G 


140 


PLACE  AND   PURPOSE 


events  in  the  early  stages  of  investigation,  is  a  mistake. 
It  is  not  only  for  the  most  part  labor  thrown  away,  as 
subsequent  inquiry  will  in  all  probability  furnish  rea 
sons  for  largely  modifying  the  earlier  classifications, 
however  carefully  drawn  up  ;  but,  as  Sir  John  Herschel 
intimates  has  happened  in  physical  science,  it  may  even 
act  as  a  positive  hinderance  to  the  progress  of  knowledge 
by  giving  an  artificial  rigidity  to  nomenclature  at  a  time 
when  it  is  most  important  that  it  should  be  flexible  and 
elastic.  It  will  accordingly  be  found  that  the  writers 
who  have  done  most  for  Political  Economy  in  its  ear 
ly  stages  have  troubled  themselves  but  little  with  defi 
nitions.  The  number  of  definitions,  for  example,  to 
be  found  in  the  economical  writings  of  Turgot,  Adam 
Smith,  and  Kicardo,  might  be  counted  on  the  fingers. 
This,  however,  is  no  argument  against  the  gradual  intro 
duction  of  a  scientific  nomenclature  into  this  science  as 
the  progress  of  our  knowledge  reveals  the  necessity  of 
taking  note  of  conditions  naturally  enough  overlooked 
in  the  first  essays  at  interpretation.  Such  a  nomenclat 
ure  serves  a  double  purpose  :  it  becomes  a  record  of  the 
degree  of  progress  actually  achieved,  and  it  supplies  a 
frame-work  or  scaffolding  from  which  the  builders  may 
carry  up  the  structure  to  higher  elevations.  I  say  a  "  scaf 
folding,"  because  it  must  ever  be  borne  in  mind  that  in 
Political  Economy,  as  in  all  the  positive  sciences,  classifi 
cation,  definition,  nomenclature,  is  scaffolding  and  not 
foundation  —  consequently  a  part  of  the  work  which  we 
must  always  be  prepared  to  modify  or  cast  aside  so  soon 
as  it  is  found  to  interfere  with  the  progress  of  the  build 
ing. 

I  remarked  just  now  that  Tlicardo  has  given  few  defi- 


OF  DEFINITION.  147 

nitions,but  undoubtedly  he  carried  the  science  to  a  point 
at  which  definitions  became  urgently  needed.  This  want 
his  successors  have  attempted  to  supply,  not  always,  I 
think,  with  a  just  apprehension  of  what  the  aim  of  defi 
nition  in  a  progressive  science  should  be.  I  am  far  from 
thinking  that  Political  Economy  has  yet  reached  a  stage 
at  which  a  complete  nomenclature — a  nomenclature  mak 
ing  any  pretensions  to  being  definitive — could  be  con 
structed,  or  that  it  would  be  wise  to  make  the  attempt ; 
but  perhaps  we  have  attained  a  point  at  which  some  pre 
cision  may  be  usefully  essayed  in  giving  shape  to  its 
more  fundamental  conceptions.  Even  here,  however,  it 
must  be  admitted,  the  science  is  far  yet  from  having 
spoken  its  last  word ;  and  consequently  even  here  our 
definitions  must  still  be  taken  as  provisional  only — as 
liable  to  be  modified,  or,  it  may  be,  entirely  set  aside,  as 
the  exigencies  of  advancing  knowledge  may  prescribe. 

§  3.  In  connection  with  the  subject  of  classification,  a 
further  remark  must  be  made.  In  controversies  about 
definitions,  nothing  is  more  common  than  to  meet  objec 
tions  founded  on  the  assumption  that  the  attribute  on 
which  a  definition  turns  ought  to  be  one  which  does  not 
admit  of  degrees.  This  being  assumed,  the  objector 
goes  on  to  show  that  the  facts  or  objects  placed  within 
the  boundary-line  of  some  definition  to  which  exception 
is  taken,  can  not  in  their  extreme  instances  be  clearly 
discriminated  from  those  which  lie  without.  Some  equiv 
ocal  example  is  then  taken,  and  the  framer  of  the  defini 
tion  is  challenged  to  say  in  which  category  it  is  to  be 
placed.  Kow  it  seems  to  me  that  an  objection  of  this 
kind  ignores  the  inevitable  conditions  under  which  a 


THE  PLACE  AND  PURPOSE 

scientific  nomenclature  is  constructed  alike  in  Political 
Economy  and  in  all  the  positive  sciences.  In  such  sci 
ences  nomenclature,  and  therefore  definition,  is  based 
upon  classification,  and  to  admit  of  degrees  is  the  char 
acter  of  all  natural  facts.  As  has  been  said,  there  are 
no  hard  lines  in  nature.  Between  the  animal  and  vege 
table  kingdoms,  for  example,  where  is  the  line  to  be 
drawn  ?  Vegetables  only,  it  is  true,  decompose  carbonic 
acid,  but  then  all  vegetables  (e.  g.,  the  fungi,  which  ob 
tain  their  carbon  by  feeding  on  other  vegetables,  and 
some  parasitic  plants)  do  not  do  so.  Some  vegetables 
have  motor-action  like  animals ;  and,  again,  the  lowest 
classes  of  animals  have  no  muscles  or  nerves.  "  If,  then," 
says  Mr.  Murphy,  "  vegetables  have  motor-actions  like 
animals,  and  if  there  are  whole  tribes  of  vegetables 
which,  like  animals,  do  not  decompose  carbonic  acid,  and 
if  the  lowest  class  of  animals  have  no  muscles  or  nerves, 
what  is  the  distinction  between  the  kingdoms  ?  I  reply 
that  I  do  not  believe  there  is  any  absolute  or  certain  dis 
tinction  whatever." '  External  objects  and  events  shade 
off  into  each  other  by  imperceptible  differences,  and  con 
sequently  definitions  whose  aim  it  is  to  classify  such  ob 
jects  and  events  must  of  necessity  be  founded  on  circum 
stances  partaking  of  this  character.  The  objection  pro 
ceeds  on  the  assumption  that  groups  exist  in  nature  as 
clearly  discriminated  from  each  other  as  are  the  mental 
ideas  formulated  by  our  definitions ;  so  that,  where  a 
definition  is  sound,  the  boundary  of  the  definition  will 
have  its  counterpart  in  external  facts.  But  this  is  an  il 
lusion.  No  such  clearly  cut  divisions  exist  in  the  actual 

1  "  Habit  and  Intelligence,"  by  J.  J.  Murphy,  vol.  i.  p.  1C5. 


OF  DEFINITION.  149 

universe ;  and  if  we  feign  them  in  our  classifications,  we 
should  bear  in  mind  that  they  are,  after  all,  but  fictions 
— contrivances  called  for,  indeed,  and  rendered  necessa 
ry  by  the  weakness  of  the  human  intellect,  which  is  un 
able  to  contemplate  and  grasp  nature  as  a  whole,  but 
having  no  counterpart  in  the  reality  of  things.  Let  me 
not,  however,  be  misunderstood.  I  say  our  classifications 
are  fictions,  but,  if  sound,  they  are  fictions  founded  upon 
fact.  The  distinctions,  formulated  in  the  definition  of 
the  class,  have  a  real  existence,  though  the  facts  or  ob 
jects  lying  on  each  side  of  the  line,  and  embodying  the 
distinguished  attributes,  fade  into  each  other  by  imper 
ceptible  degrees.  The  elenlent  of  fiction  lies,  not  in  the 
qualities  attributed  to  the  things  defined,  but  in  the  sup 
position  that  the  objects  possessing  these  qualities  are  in 
nature  clearly  discriminated  from  those  that  are  without 
them.  It  is,  therefore,  no  valid  objection  to  a  classifica 
tion,  nor,  consequently,  to  the  definition  founded  upon  it, 
that  instances  may  be  found  which  fall  or  seem  to  fall 
on  our  lines  of  demarkation.  This  is  inevitable  in  the 
nature  of  things.  But,  this  notwithstanding,  the  clas 
sification  (and  therefore  the  definition)  is  a  good  one 
if,  in  those  instances  which  do  not  fall  on  the  line,  the 
distinctions  marked  by  the  definition  are  such  as  it  is 
important  to  mark — such  that  the  recognition  of  them 
will  help  the  inquirer  forward  toward  the  desiderated 
goal. 

§  4.  The  other  portion  of  the  defining  process  is  nam 
ing,  which,  though  less  important  than  classification,  is 
still  far  from  beins;  without  serious  bearing  on  -the  sue- 

O  O 

cessful  cultivation  of  positive  knowledge.     On  this  sub- 


150  THE  PLACE  AND  PURPOSE 

ject  the  following  weighty  aphorism,  laid  down  by  Mr. 
Mill,  deserves  our  consideration  : 

"Whenever  the  nature  of  the  subject  permits  our  rea 
soning  processes  to  be,  without  danger,  carried  on  mechan 
ically,  the  language  should  be  constructed  on  as  mechan 
ical  principles  as  possible ;  while,  in  the  contrary  case,  it 
should  be  so  constructed  that  there  shall  be  the  greatest 
possible  obstacles  to  a  merely  mechanical  use  of  it."  ] 

Now  within  which  of  the  categories  here  indicated 
ought  Political  Economy,  regard  being  had  to  the  nature 
of  its  subject,  to  be  considered  as  falling  ?  Within  the 
category  in  which  our  reasoning  processes  may  be  car 
ried  on  mechanically  without  danger,  and  in  which, 
therefore,  the  language  should  be  constructed  on  as  me 
chanical  principles  as  possible ;  or  within  that  in  which 
the  language  should  be  constructed  on  the  opposite  prin 
ciple  of  preventing  its  employment,  as  far  as  possible,  in 
a  merely  mechanical  way  ?  I  have  no  hesitation  in  say 
ing  that  Political  Economy  belongs  pre-eminently  to  the 
group  of  studies  in  which  the  reasoning  processes  can 
not  be  carried  on  mechanically  without  the  gravest  dan 
ger,  and  in  which,  consequently,  the  rule  laid  down  in 
the  latter  portion  of  the  aphorism  just  quoted  for  the 
construction  of  a  nomenclature  ought  to  be  observed. 
The  subject  has  been  discussed  by  Mr.  Mill  in  its  widest 
bearings  in  his  chapter  on  the  requisites  of  a  philosoph 
ical  language,2  and  need  not  therefore  be  entered  into 
here  at  any  length.  But  if  any  one  doubt  the  sound 
ness  of  this  position,  I  would  ask  him  to  reflect  upon  the 
mental  processes  by  which  economic  truths  are  estab- 

1  "Logic,"  book  iv.  chap.  vi.  §  6.        2  Ibid.,  book  iv.  chap.  vi. 


OF  DEFINITION.  151 

lislied.  Let  him  follow  the  course  of  proof  in  any  act 
ual  case,  and  I  think  he  will  find  that,  in  order  to  the 
right  conduct  of  the  ratiocination,  by  much  the  most  im 
portant  condition  is  that  in  each  step  of  the  argument 
the  reasoner  should  keep  as  fully  as  possible  before  him 
the  actual  concrete  circumstances  denoted  by  the  terms 
he  employs.  I  think  he  will  find  that  it  is  mainly  in 
proportion  as  this  has  been  done  that  economic  reason 
ing  has  issued  in  results  of  any  real  value,  while  to  the 
failure  to  satisfy  this  condition  may  be  traced  no  small 
proportion  of  the  errors  which  have  marked  the  course 
of  economic  research.  I  hold,  therefore,  that  it  is  of  the 
utmost  importance,  not  only  in  Political  Economy,  but  in 
all  social  investigation,  that  the  termsjof  our  nomenclat- 
ure  should,  as  far  as  possible,  serve  as  constant  remind 
ers  of  the  nature  of  the  concrete  objects  which  they  are 
employed  to  denote ;  and  that  for  this  purpose,  to  bor 
row  Mr.  Mill's  language, "  as  much  meaning  as  possible 
should  be  thrown  into  the  formation  "  of  our  economic 
terms,  "  the  aids  of  derivation  and  analogy  being  em 
ployed  to  keep  alive  a  consciousness  of  all  that  is  signi 
fied  by  them." 

It  wrill  serve  to  throw  light  at  once  on  the  resources 
at  the  disposal  of  the  economist  in  this  respect,  and  also 
on  the  special  difficulties  under  which  Political  Econo 
my  labors  in  the  matter  of  definition,  if  we  advert  for 
a  moment  to  the  case  of  the  physical  science  which 
offers  the  most  perfect  example  of  a  nomenclature 
framed  on  the  principle  we  have  now  in  view.  This 
is  chemistry,  in  which  the  nomenclature  is  at  once 
significant  and  technical — significant,  inasmuch  as  its 
terms  are  composed  of  elements  taken  either  from  ex- 


THE  PLACE  AND  PURPOSE 

isting  or  from  ancient  languages  which  carry  their  orig 
inal  meaning  into  their  new  occupation ;  and  tech 
nical,  inasmuch  as  in  their  actual  form  they  are  only 
employed  as  members  of  a  scientific  nomenclature. 
Such  words  as  oxygen,  hydrogen,  carbonate  of  lime, 
peroxide  of  iron,  are  all  full  of  meaning,  but  are  never 
employed  except  to  express  certain  known  chemical 
elements  or  combinations.  From  this  union  of  the  two 
qualities  of  significance  and  technicality  in  its  nomen 
clature  an  immense  advantage  results  for  chemical  sci 
ence  ;  since  its  terms  have  in  consequence  the  power 
of  calling  up  with  great  distinctness  the  concrete  ob 
jects  they  are  intended  to  denote ;  while,  having  been 
constructed  for  the  special  purpose  of  designating  those 
objects,  and  never  being  employed  in  common  speech, 
they  are  free  from  all  associations  which  could  confuse 
or  mislead  either  those  who  employ  or  those  who  hear 
them.  The  point,  then,  to  be  considered  is  how  far  it 
is  possible  to  construct  for  Political  Economy  a  nomen 
clature  which  shall  fulfill  the  same  ends  as  nomenclat 
ure  in  chemistry.  It  appears  to  me  that  a  certain  ap 
proximation  toward  this  result  is  feasible,  but  only  an 
approximation ;  and  that,  after  all  is  done,  the  technical 
language  of  Political  Economy  must  ever  fall  vastly 
short  of  the  perfection  attained  by  terminology  in 
chemical  science.  In  coining  to  this  conclusion,  I  as 
sume  it  as  settled  that  the  technical  terms  of  Political 
Economy  are  to  be  taken  from  popular  language,  and 
this,  not  merely  as  regards  their  elements,  as  is  done 
in  chemistry,  but,  so  to  speak,  bodily  in  their  complete 
forms.  "Whether  it  would,  at  any  time,  have  been  pos 
sible  to  have  constructed  an  economic  nomenclature  on 


OF  DEFINITION.  153 

the  plan  adopted  in  chemistry  is  perhaps  scarcely  worth 
considering.  The  science  has,  in  fact,  been  developed 
through  the  instrumentality  of  popular  language.  It  is 
through  this  medium  that  the  ideas  of  .all  its  greatest 
thinkers  have  been  put  forth ;  it  is  in  this  clothing  that 
the  world  is  familiar  with  them  ;  and  it  is,  therefore, 
now  palpably  too  late,  even  if  there  were  no  other  re 
straining  consideration,  to  think  of  recasting  its  doc 
trines  in  other  forms.  Such  words  as  production,  dis 
tribution,  exchange,  value,  cost,  labor,  abstinence,  capital, 
profit,  interest,  wages,  must  now  for  good  or  for  evil  re 
main  portions  of  economic  nomenclature ;  and  these 
have  all  been  drawn  in  their  actual  forms  from  the 
vernacular,  and  are  in  constant  use  in  popular  speech. 
With  regard  to  such  words,  they  are  capable  enough  of 
fulfilling  the  first  of  the  two  functions  fulfilled  by  no 
menclature  in  chemistry  —  of  calling  up,  that  is  to  say 
— always  supposing  them  to  be  used  with  deliberation 
— concrete  facts  and  objects  with  sufficient  vividness. 
The  hitch  occurs  in  their  inaptitude  for  the  second  of 
the  two  purposes  required  of  them,  for  bringing  to  the 
mind  the  exact  facts  and  objects,  neither  more  nor  few 
er,  which  we  desire  to  indicate. 

For  the  position  of  things  is  this :  The  economist 
finds  it  necessary,  for  the  reasons  which  have  been 
stated  above,  to  arrange  the  phenomena  of  wealth  in 
classes  on  a  certain  principle — that  principle  being,  in 
fact,  the  convenience  of  his  own  investigations  ;  and  he 
has  to  find  names  for  the  classes  thus  constituted  in  the 
terms  of  popular  language.  But  popular  language  has 
not  been  framed  to  suit  the  convenience  of  economic 
speculation,  but  with  quite  other  views.  Its  distinctions 

G  2 


THE  PLACE  AND  PURPOSE 

and  classifications  do  not  always  or  generally  coincide 
with  those  which  are  most  important  for  the  elucida 
tion  of  the  economy  of  wealth ;  and,  even  where  this 
correspondence  is  tolerably  close,  a  term  in  constant  use 
in  ordinary  speech  inevitably  gathers  round  it  a  vague 
aroma  of  association,  sure  to  suggest  in  particular  con 
texts  ideas  which  have  no  proper  connection  with  the 
purposes  of  scientific  research,  and  which  therefore  can 
not  but  act  as  hinderances  to  the  reasoning  process. 
That  precision  of  meaning,  accordingly,  which  is  so  con 
spicuous  in  the  nomenclature  of  chemistry,  and  in  gen 
eral  of  the  physical  sciences,  is  unattainable  in  Political 
Economy.  Its  nomenclature  satisfies,  indeed,  the  condi 
tion  of  having  plenty  of  meaning.  With  even  greater 
vividness  than  the  nomenclature  of  chemistry,  it  is  capa 
ble  of  calling  up  the  concrete  things  denoted  by  its  terms  ; 
but  for  this  advantage  it  pays  the  heavy  price  of  loss  of 
precision — of  vagueness  and  uncertainty  as  to  the  prop 
er  limitation  to  be  given  to  its  most  important  words. 
The  remedy,  so  far  as  remedy  is  possible,  seems  to  be 
twofold  :  first,  to  keep  our  definitions  of  economic 
terms  as  close  to  the  usages  of  common  speech  as  the 
requirements  of  correct  classification  willallow.  Terms 
must,  indeed,  now  and  then  be  strained  to  express 
meanings  and  to  suffer  limitations  which  in  ordinary 
discourse  they  do  not  express  or  bear,  since  otherwise 
the  ends  of  classification  would  be  sacrificed  ;  and  it  is, 
therefore,  no  conclusive  objection  to  an  economic  defi 
nition  that  it  does  not  accurately  coincide  with  popular 
use.  But  it  should,  nevertheless,  be  fully  recognized 
that  such  deviations  constitute  a  demerit  in  definition, 
and  may  become  a  serious  one.  The  second  remedy 


OF  DEFINITION".  155 

against  the  evil  is  clearness  and  distinctness  of  defini 
tion  wherever  terms  of  importance  are  employed ;  care 
being  taken,  where  the  economic  sense  differs  from  the 
popular  one,  to  bring  into  as  strong  relief  as  possible  the 
points  of  difference ;  with  wiiich  precaution  the  prac 
tice  may  be  usefully  combined  of  throwing  in  a  caveat 
from  time  to  time,  where  the  context  would  be  in  dan 
ger  of  suggesting  the  popular  rather  than  the  scientific 
sense. 

^^} 

§  5.  We  may  now  sum  up  the  general  results  of  the 
foregoing  discussion  : 

1.  The  first  requisite  of  a  good  definition  in  Political 
Economy  is  that  it  should  mark  those  distinctions  in 
facts  and  objects  which  it  is  important  to  mark  with  a 
view  to  the  elucidation  of  the  phenomena  of  wealth ; 
and  our  nomenclature  will  be  good  or  bad,  helpful  or 
obstructive,  according  as  it  coincides  with  such  real  and 
pertinent  distinctions,  or  sets  up  others  which  are  arbi 
trary,  fanciful,  or  irrelevant. 

2.  So  far  as  is  consistent  with  satisfying  the  forego 
ing  condition,  economic  terms  should  be  used  as  nearly 
as  possible  in  their  popular  sense ;  though,  as  strict  ad 
herence  to  popular  usage  is  not  compatible  with  fulfill 
ing  the  requirements  of  sound  classification,  the  mere 
circumstance  of  deviation  from  popular  usage  is  no  con 
clusive  objection  to  an  economic  definition. 

3.  It  is  no  valid  objection  to  an  economic  definition 
that  the  attribute  on  which  it  turns  is  found  to  exhibit 
degrees  in  its  concrete  embodiments.    This  is  inevitable 
from  the  nature  of  the  case. 

4.  Definitions  in  the  present  state  of  economic  science 


156     TIIE  PLACE  AND  PURPOSE  OF  DEFINITION. 

should  be  regarded  as  provisional  only,  and  may  be  ex 
pected  to  need  constant  revision  and  modification  with 
the  progress  of  economic  knowledge.  Economic  defi 
nitions  are  thus  progressive.  A  complete  nomenclature 
pretending  to  be  definitive  would  at  present  be  prema 
ture,  and,  if  framed  and  generally  accepted,  would  prob 
ably  prove  obstructive.  J3ut  the  time  has  come  when 
increased  precision  may  be  usefully  given  to  the  more 
fundamental  conceptions,  always  with  the  understand 
ing  that  these  also  must  still  be  taken  as  provisional. 


LECTURE  VII. 

OF  THE  MALTHUSIAN  DOCTRINE   OF  POPULATION. 

§  1.  I  ALLUDED  in  the  opening  lecture  of  this  course  to 
the  present  unsettled  and  unsatisfactory  condition  of  Po 
litical  Economy  with  regard  to  some  of  its  fundamental 
principles,  attributing  this  state  of  things,  as  you  will 
probably  remember,  to  the  loose  and  unscientific  views 
which  prevail  respecting  the  character  of  economic  doc 
trines,  and  the  kind  of  proof  by  which  they  are  to  be 
sustained  or  refuted.  This  led  me  in  the  succeeding 
lectures  to  explain  and  illustrate  at  some  length  the 
character  and  method  of  the  science.  I  now  propose  to 
vindicate  the  importance  of  the  topics  on  which  I  have 
been  insisting,  by  showing,  in  the  instance  of  some  fun 
damental  doctrines,  the  manner  in  which  unscientific 
views  regarding  the  nature  and  method  of  the  science 
have  operated  in  producing  those  differences  of  opinion 
to  which  I  have  referred. 

One  of  these  doctrines,  as  I  conceive  quite  funda 
mental  in  the  science  of  Political  Economy,  though  im 
pugned  and  controverted  in  several  recent  publications, 
is  the  doctrine  of  population  as  propounded  by  Malthus. 
It  would  of  course  be  quite  impossible,  within  the  com 
pass  of  a  single  lecture,  to  notice,  much  less  satisfactori 
ly  to  answer,  all  the  various  objections  that  have  been  in 
times  past,  or  may  still  be,  urged  against  this  doctrine ; 


158  TIIE  MALTIIUSIAN  DOCTRINE 

and  it  would  be  unnecessary  were  it  possible,  most  of 
them  having  received  as  full  an  answer  as  they  deserve 
either  from  Malthus  himself  or  from  succeeding  writers. 
I  shall  therefore  confine  myself  to  those  which,  either 
from  their  novelty,  or  from  the  circumstance  that  they 
have  been  lately  indorsed  by  some  economists  of  posi 
tion,  or  from  their  logical  character,  will  be  most  suit 
able  to  the  object  which  I  have  in  view — the  illustration 
of  economic  method. 

In  order,  however,  that  you  should  appreciate  the  force 
of  these  objections,  it  will  be  necessary  for  me  to  state 
the  doctrine  against  which  they  have  been  advanced. 

The  celebrated  Malthusian  doctrine  is  to  the  follow 
ing  effect,  viz.,  that  there  is  a  "  constant  tendency  in  all 
animated  life  to  increase  beyond  the  nourishment  pre 
pared  for  it ;"  or,  with  reference  more  particularly  to 
the  human  race,  that  "  population  tends  to  increase  faster 
than  subsistence."  From  what  I  have  already  said  of 
the  character  of  an  economic  law,  as  well  as  from  the 
terms  of  the  proposition  itself,  you  will  at  once  perceive 
that  it  is  not  here  asserted  that  population  in  fact  in 
creases  faster  than  subsistence  :  this  would  of  course  be 
physically  impossible.  You  will  also  perceive  that  it  is 
not  inconsistent  with  this  doctrine  that  subsistence  should 
in  fact  be  increased  much  faster  than  population.  It 
may  also,  perhaps,  be  worth  remarking  that  the  doctrine, 
as  it  is  stated  by  Malthus,  is  not  invulnerable  to  verbal 
criticism.  The  sentence,  "population  tends  to  increase 
faster  than  subsistence,"  is  elliptical,  and  the  natural; 
way  of  supplying  the  ellipsis  would  be  by  reading  it 
thus  :  "  Population  tends  to  increase  faster  than  subsist 
ence  tends  to  increase  ;"  but  it  can  not  with  propriety  be 


OF  POPULATION.  159 

said  that  subsistence  "  tends  to  increase  "  at  all.  I  men 
tion  this  verbal  inaccuracy,  not  because  I  think  it  is  likely 
that  any  candid  or  intelligent  reader  could  be  misled  by 
it,  but  because  I  have  seen  it  dwelt  upon  by  anti-Mal- 
tlmsian  writers.  But,  waiving  verbal  cavils,  what  Mal- 
thus  asserted,  and  what  it  is  the  object  of  his  essay  to 
prove,  is  this — that,  regard  being  had  to  the  powers  and 
propensities  in  human  nature  on  which  the  increase  of  the 
species  depends,  there  is  a  constant  tendency  in  human 
beings  to  multiply  faster  than,  regard  being  had  to  the 
actual  circumstances  of  the  external  world,  and  the  power 
which  man  can  exercise  over  the  resources  at  his  disposal, 
the  means  of  subsistence  are  capable  of  being  increased.  * 
The  reasoning  by  which  Malthus  established  thisv 
proposition  was  as  follows:  he  had  first  to  ascertain 
the  capacity  and  disposition  to  increase  inherent  in  man 
kind — in  other  words,  the  natural  strength  of  the  princi 
ple  of  population.  Xow,  in  order  to  discover  the  real 
character  of  any  given  principle,  obviously  the  proper 
course  is  to  consider  that  principle  as  it  operates  when 
unimpeded  by  principles  of  an  opposite  tendency.  Mal 
thus,  accordingly,  took  an  instance  in  which  the  external 
conditions  were  most  favorable  to  the  uncontrolled  ac 
tion  of  the  principle  of  population.  This  was  the  case 
of  new  colonies,  where  a  population  with  all  the  resour 
ces  of  civilization  at  their  command  are  brought  into 
contact  with  a  new  and  virgin  soil.  In  these  he  found 
that  population  from  internal  sources  alone,  and  exclud 
ing  immigration,  frequently  doubled  itself  in  twenty -five 
years.1  This  rate  of  increase  was  evidently  not  owing 

1  As  a  specimen  of  the  intelligence  exhibited  in  criticisms  of  Malthus, 
take  the  following  from  Blanqui's  "Histoire  de  T^conomie  Politique:" 


1(50  THE  MALTHUSIAN  DOCTRINE 

to  any  tiling  peculiar  or  abnormal  in  the  physical  or 
mental  constitution  of  the  inhabitants  of  such  countries, 
but  owing  to  the  favorable  character  of  the  external  cir 
cumstances  under  which  the  principle  of  population 
came  into  play.  He  therefore  concluded  that  the  ratio 
of  increase,  according  to  which  population  doubles  itself 
in  twenty-five  years,  represents  the  natural  force  of  the 
principle — the  rate  at  which  population  always  tends  to 
increase — the  rate  at  which,  if  unrestrained  by  principles 
of  an  opposite  character  or  by  the  physical  incapacity  of 
sustaining  life,  population  always  will  increase. 

On  the  other  hand,  on  looking  to  the  means  placed  at 
man's  disposal  for  obtaining  subsistence,  Malthas  found 
that  it  was  physically  impossible  that  subsistence  could 
be  increased  at  this  rate.  The  surface  of  the  globe  is 
limited ;  the  portions  of  it  suitable  to  cultivation  and  ac 
cessible  to  human  enterprise  are  still  more  limited  ;  and 
the  difficulty  of  obtaining  food  from  a  limited  area  in 
creases  as  the  quantity  raised  from  it  is  increase^.1  If, 

"  Le  choix  que  Malthus  a  fait  de  1'Amerique,  ou  la  population  double  tons 
les  vingt-cinq  ans,  n'est  pas  plus  concluant  que  celui  de  la  Suede,  ou,  se- 
lon  M.  Godwin,  elle  ne  double  que  tous  les  cent  ans.  Les  societes  ne  pre 
cedent  point  ainsi  par  periodes  regulieres,  comme  les  astres  et  les  saisons, 
etc."  Malthus  could  find  his  opponents  in  arguments,  but  not  in  brains. 

1  Against  this  it  is  urged  that,  however  true  the  statement  may  be  as  an 
abstract  proposition,  yet,  regard  being  had  to  the  actual  state  of  the  world 
—the  increased  supplies  of  food  which  even  the  most  advanced  countries 
under  an  improved  agricultural  system  are  capable  of  yielding,  as  well  as 
the  vast  districts  in  America,  New  Zealand,  and  elsewhere,  which  are  yet 
to  be  brought  under  cultivation— the  doctrine  must,  for  ages  to  come,  be 
destitute  of  all  practical  significance.  In  a  review  of  Mansfield's  "Para 
guay,  Brazil,  and  the  Platte,"  in  Fraser's  Magazine  (Nov.,  185G),  the 
writer,  after  rather  more  than  the  usual  misrepresentation  of  Malthu- 
sian  views,  puts  the  objection  thus : 

"Meanwhile  stood  by,  laughing  bitterly  enough,  the  really  practical 
men— men  such  as  the  author  of  the  book  now  before  us  :  the  travelers, 


OF  POPULATION. 

e.  g.,  40,000,000  quarters  of  corn  are  produced  annually 
in  the  United  Kingdom  at  present,  it  might  be  possible 

the  geographers,  the  experimental  men  of  science,  who  took  the  trouble, 
before  deciding  on  what  could  be,  to  find  out  what  was,  and,  as  it  were, 
'  took  stock '  of  the  earth  and  her  capabilities  before  dogmatizing  on  the 
future  fate  of  her  inhabitants.  And,  'What?'  they  asked,  in  blank  as 
tonishment,  '  what,  in  the  name  of  maps  and  common-sense,  means  this 
loud  squabble  ?  What  right  has  any  one  to  dogmatize  on  the  future  of 
humanity  while  the  far  greater  part  of  the  globe  is  yet  unredeemed  from 
the  wild  beast  and  the  wild  hunter?  If  scientific  agriculture  be  too  cost 
ly,  is  there  not  room  enough  on  the  earth  for  as  much  unscientific  and 
cheap  tillage  as  would  support  many  times  over  her  present  population  ? 
What  matters  it,  save  as  a  question  of  temporary  make-shift,  whether  En 
gland  can  be  made  to  give  thirty-three  bushels  of  wheat  per  acre  instead 
of  thirty-one,  by  some  questionably  remunerative  outlay  of  capital,  while 
the  Texan  squatter,  without  any  capital  save  his  own  two  hands,  is  grow 
ing  eighty  bushels  an  acre?  Your  disquisitions  about  the  "margin  of 
productiveness  "  are  interesting,  curious,  probably  correct,  valuable  in  old 
countries,  but  nowhere  else.  For  is  the  question  whether  men  shall  live, 
or  even  be  born  at  all,  to  be  settled  by  them,  forsooth,  while  the  Valley  of 
the  Ottawa  can  grow  corn  enough  to  supply  all  England,  the  Valley  of  the 
Mississippi  for  all  Europe  ? — while  Australia  is  a  forest,  instead  of  being, 
as  it  will  be  one  day,  the  vineyard  of  the  world  ?— while  New  Zealand  and 
the  Falklands  are  still  waste;  and  Polynesia,  which  may  become  the 
Greece  of  the  New  World,  is  worse  than  waste? — while  Nebraska  alone  is 
capable  of  supporting  a  population  equal  to  France  and  Spain  together? — 
while,  in  the  Old  World,  Asia  Minor,  once  the  garden  of  old  Rome,  lies  a 
desert  in  the  foul  and  lazy  hands  of  the  Ottoman  ? — while  the  tropics  pro 
duce  almost  spontaneously  a  hundred  valuable  articles  of  food,  all  but 
overlooked  as  yet  in  the  exclusive  cultivation  of  cotton  and  sugar  ?  and, 
finally  (asks  Mr.  Mansfield  in  his  book),  while  South  America  alone  con 
tains  a  territory  of  some  eight  hundred  millions  of  square  miles,  at  least 
equaling  Egypt  in  climate,  and  surpassing  England  in  fertility ;  easy  of 
access ;  provided,  by  means  of  its  great  rivers,  with  unrivaled  natural 
means  of  communication,  and  "with  water-power  enough  to  turn  all  the 
mills  in  the  world ;"  and  needing  nothing  but  men  to  make  it  one  of  the 
gardens  of  the  world  ?'  " 

There  are  travelers  and  travelers.  The  passage  just  quoted  gives  us 
the  view  of  one  class  on  the  problem  raised  by  Malthus ;  on  the  other 
hand, Von  Ilumboldt,  in  his  "Essay  on  New  Spain"  (vol.  i.  p.  107),  char 
acterizes  the  work  of  Malthus  as  "one  of  the  most  profound  works  on  Po 
litical  Economy  which  has  ever  appeared."  But  to  come  to  the  reviewer's 
argument : 


162  TIIE  MALTHUSIAN  DOCTRINE 

at  the  end  of  twenty-five  years,  by  means  of  improved 
agricultural  processes,  to  raise  80,000,000  quarters  annu- 

The  objection,  it  will  be  observed,  is  a  purely  practical  one.  It  is  not 
denied  that  "population  tends  to  increase  faster  than  subsistence;"  that, 
however  great  be  the  quantity  of  food  which  the  earth  is  capable  of  yield 
ing?  population  may  ultimately  overtake  it,  and  tends  to  do  so ;  but  it  is 
said,  of  what  practical  moment  is  this  to  us  living  now,  with  the  boundless 
resources  of  new  worlds  still  at  our  disposal  ?  The  answer — impractical 
answer — is,  it  is  every  thing  to  us,  if  these  resources,  however  extensive, 
are  not  in  fact  turned  to  account.  It  matters  not  whether  the  obstacles 
be  physical  or  moral,  whether  absolute  and  insuperable  or  the  result  sim 
ply  of  prejudice  and  ignorance,  so  long  as  they  are  effectual  in  preventing 
the  cultivation  of  the  countries  in  question.  So  long  as  this  is  the  case, 
these  countries,  to  all  practical  intents  and  purposes,  may  be  said  not  to 
exist  for  us  :  they  can  no  more  be  counted  on  as  means  of  supporting  pop 
ulation  than  the  countries  in  the  moon.  Yet  because,  forsooth,  "  the  Val 
ley  of  the  Ottawa  can  grow  corn  enough  to  support  all  England,"  although 
it  is  admitted  that  it  does  not  do  so,  and  it  is  not  asserted  that  there  is 
any  immediate  prospect  that  it  will,  this  "really  practical "  reviewer  holds 
that  it  is  the  height  of  absurdity  to  speak  of  the  necessity  of  restraining 
population,  and  treats  all  those  who  do  as  dreamers  and  lunatics ! 

A  laborer,  e.  g.,  in  Dorsetshire,  on  nine  shillings  a  week  is  hesitating 
about  marriage.  The  "speculative"  Malthusian  advises  him  to  wait  a 
little  while  till  he  saves  enough  to  form  at  least  the  nucleus  of  a  support 
for  his  wife  and  family.  "The  really  practical  man,"  on  the  other  hand, 
says  to  him,  Why  hesitate  ?  Is  not  the  Valley  of  the  Ottawa  capable  of 
growing  food  for  all  England  ? 

The  immense  food-producing  capabilities  of  the  earth  yet  available  for 
us  were  not  overlooked  by  Malthus,  nor,  so  far  as  I  know,  have  they  been 
by  those  who  accept  his  doctrine,  nor  is  there  any  reason  to  suppose  that 
either  master  or  followers  have  underrated  the  importance  of  turning  these 
capabilities  to  account.  They  have,  however,  urged  that  the  existence 
of  capabilities  is  no  reason  for  weakening  the  restraints  on  population  ; 
because,  whatever  be  the  extent  of  these  resources,  the  development  of 
them  must  be  a  work  of  time,  and  population  is  found  in  fact  to  be  always 
fully  able  to  keep  pace  with  the  process.  The  instinct  which  holds_p_eople 
to_their  native  land,  in_spite  of  the  alluring  prospects  of  other  regions, 
the  tardiness  with  which  capital  moves  to  new  countries,  and  the  igno- 
rance^indolence.  and  barbarism  of  most  of  the  races  which  occupy  th"em, 
render  the  introduction  of  systematized  industry  into  such  regions  a  mat- 
tre  of  much  difficulty  and  of  slow  accomplishment.  The  greater  part  of 
India  has  now  been  under  English  rule  for  a  century,  and  yet  we  know  how 
difficult  it  is  to  attract  capital  thither  without  a  government  guarantee  ; 


OF  POPULATION. 

silly :  it  is  perhaps  conceivable  that,  by  forcing  to  the 
highest  degree  every  patch  of  cultivable  land  in  the 
kingdom,  at  the  end  of  fifty  years  160,000,000  quarters 
might  be  raised :  certain,  however,  it  is  that  the  annual 
production  of  corn  in  the  United  Kingdom  could  not  go 
on  forever  at  this  rate ;  but  it  is  no  less  certain,  in  view 
of  the  capacity  of  increase  in  human  beings,  that  the 
population  of  the  United  Kingdom  could,  and,  in  view 
of  their  natural  propensities  in  the  same  direction,  that 
they  would,  proceed  at  this  rate  forever,  till  brought  to 
a  stop  by  the  physical  impossibility  of  obtaining  food — 
supposing,  that  is  to  say,  that  their  natural  power  and 
disposition  to  multiply  operated  unchecked  by  princi 
ples  of  an  opposite  character. 

The  result,  therefore,  of  the  consideration  of  these 
facts  by  Malthus  was  the  enunciation  of  the  doctrine 


and,  notwithstanding  all  that  has  been  written  and  spoken  of  the  bound 
less  resources  of  India,  and  the  pressing  needs  of  England  for  articles  to 
the  production  of  which  her  soil  and  climate  are  peculiarly  suitable,  how 
little  has  yet  been  done  to  turn  these  advantages  to  account !  What 
would  a  Manchester  cotton-spinner  think  of  the  advice  not  to  hesitate 
about  erecting  new  mills  and  machinery,  because,  though  the  supply  of 
cotton  be  rather  short  just  now,  the  plains  of  the  Deccan  are  capable  of 
producing  more  than  he  will  be  able  to  work  up  for  half  a  century  ?  Yet 
the  reviewer  who,  in  the  somewhat  more  momentous  affair  of  human  ex 
istence,  gives  precisely  analogous  advice  takes  credit  to  himself  for  pre 
eminent  practical  wisdom. 

With  regard  to  the  other  point  adverted  to,  the  possibility  of  largely 
increasing  the  quantity  of  subsistence  raised  even  in  old  countries,  similar 
considerations  apply.  The  fact  is  undoubtedly  true  ;  but  more  food  is 
nevertheless  not  raised.  If  it  be  asked  why  this  is  so,  the  answer  is, 
because,  while  agricultural  skill  remains  at  its  present  point,  an  increased 
production  of  food  would  necessitate  a  fall  in  farmers'  profits.  And  if.it 
be  further  asked  as  to  the  grounds  of  this  necessity,  the  inquirer  may 
be  referred  to  "the  diminishing  productiveness  of  the  soil" —  the  im 
penetrable  barrier  against  which  all  anti-Malthusian  plans  and  arguments 
are  ultimately  shivered. 


TIIE  MA  LTHUSIAN  DOCTR INE 

which  I  have  just  stated — that  there  is  in  human  be 
ings  a  tendency  to  multiply  faster  than  subsistence ;  to 
increase  faster  than  subsistence  is  capable  of  being  in 
creased.  Population,  however,  as  I  have  said,  whatever 
might  be  its  tendency,  could  not  increase  faster  than 
subsistence,  inasmuch  as  human  beings  can  not  live 
without  food ;  and  further  investigation  showed  that 
subsistence  in  most  countries,  and  in  all  improving 
countries,  had  in  fact  increased  faster  than  population. 
Malthus  therefore  turned  his  attention  to  the  discovery 
of  those  antagonizing  principles  which  keep  in  check 
the  natural  power  of  population.  These,  he  found, 
were  reducible  to  two  classes,  which  he  designated  the 
preventive  and  positive  checks.  The  preventive  checks 
included  all  causes  which  operated  in  restraining  the 
natural  power  or  disposition  of  mankind  to  increase 
their  numbers,  and  were  generally  comprised  under  the 
two  heads  of  prudence  with  regard  to  marriage,  and 
vice,  so  far  as  it  interfered  with  fecundity.  The  posi 
tive  checks  included  those  causes  of  premature  death 
incident  to  a  redundant  population,  of  which  the  prin 
cipal  were  insufficient  food,  famine,  disease,  and  war. 

§  2.  Such,  in  outline,  is  the  doctrine  of  Malthus  ;  and 
such  the  line  of  reasoning  by  which  it  was  established. 
As  to  its  importance,  it  is  scarcely  too  much  to  say  that, 
while  throwing  a  strong  light  on  not  a  few  of  the  dark 
est  passages  of  history,  it  in  a  short  time  revolutionized 
the  current  modes  of  thinking  on  social  and  industrial 
J    problems.     The  material  well-being  of  a  community 
[  mainly  depends  on  the  proportion  which  exists  ^between 
thelfcuantity  of  necessaries  and  comforts  in  that  com- 


OF  POPULATION.  165 

m unity  and  the  number  of  persons  among  whom  these 
are  divided,  of  which  necessaries  and  comforts  by  far 
the  most  important  item  is  food.  All  plans,  therefore, 
for  improving  the  condition  of  the  masses  of  mankind, 
in  order  to  be  effectual,  must  be  directed  to  an  altera 
tion  in  this  proportion,  and,  to  be  permanent,  must  aim 
at  making  this  alteration  permanent.  Now,  Malthus 
showed  that  the  strength  of  the  principle  of  population 
is  such  that,  if  allowed  to  operate  unrestrained,  no  pos 
sible  increase  of  food  could  keep  pace  with  it.  It  con 
sequently  followed  that,  in  order  to  the  permanent  im 
provement  of  the  masses  of  mankind,  the  development 
of  principles  which  should  impose  some  restraint  on  the 
natural  tendency  of  the  principle  of  population  was  in 
dispensable  ;  and  that,  however  an  increase  in  the  pro 
ductiveness  of  industry  might  for  a  time  improve  the 
condition  of  a  community,  yet  this  alone,  if  unaccom 
panied  by  the  formation  of  habits  of  self-control  and 
providence  on  the  part  of  the  people  themselves,  could 
not  be  relied  upon  as  an  ultimate  safeguard  against  dis 
tress. 

The  same  discovery  l  of  Malthus — in  his  own  lan- 

1  I  say  "  discovery,"  because,  although  it  is  true  that  the  fundamental 
fact  on  which  Malthus's  doctrine  rested  had  frequently  been  noticed  be 
fore  (vide,  for  example,  McPherson's  "Annals  of  Commerce,"  1590, 
\vhere  he  quotes  a  passage  from  a  work  by  a  Piedmontese  Jesuit,  Botero, 
"  On  the  Causes  of  the  Greatness  of  Cities,"  in  which  the  writer  puts  the 
question — "What  is  the  reason  that  cities,  once  grown  to  greatness,  in 
crease  not  onward  according  to  that  proportion  ?"  and  gives  the  Malthu- 
sian  answer),  its  bearing  and  importance  with  reference  to  the  interests 
of  mankind  were  all  but  wholly  unappreciated  until  Malthus  wrote.  He  it 
was  who  first  called  attention  to  the  vast  consequences  involved  in  a  fact 
patent  to  every  observer,  and  occasionally  taken  notice  of  in  particular  in 
stances,  but  never  before  understood  in  its  full  significance.  And  this,  I 
may  observe,  is  the  nature  of  almost  all  discoveries  in  the  region  of  social 


THE  MALTHUSIAN  DOCTRINE 

gnage,  "  the  constant  pressure  of  population  against 
subsistence  " — gave  the  key  to  many  social  and  historic 
problems :  disclosed,  for  example,  the  latent  cause  by 
virtue  of  which  the  world  has  been  peopled ;  which 
forced  the  shepherds  of  Asia  from  the  primitive  birth 
place  of  the  human  race ;  which  led  the  Greeks  to 
throw  off  numerous  colonies ;  which  compelled  the 
great  migrations  of  the  northern  barbarians ;  and  which 
is  now  sending  successive  swarms  of  emigrants  to  carry 
the  English  race  and  language  to  the  utmost  corners 
of  the  earth. 

Armed  with  the  same  principle,  Malthus  was  enabled 
to  give  a  complete  and  philosophic  answer  to  the  com 
munistic  plans  which  were  at  that  time  ardently  advo 
cated  by  Godwin,  Owen,  and  others,  by  showing  that, 
as  such  schemes  offered  no  inducement  to  the  exercise 
of  prudential  restraint,  and  removed  those  which  al 
ready  existed,  they  were  defective  just  in  that  point 
without  which  human  improvement  was  impossible : 
they  provided  no  security  against  a  redundant  popula 
tion  —  none,  therefore,  against  the  want  and  misery 
which  a  redundant  population  must  occasion. 

The  practical  lessons  which  Malthus  deduced  from 
the  law  of  population  were  no  less  important.  Up  to 
the  time  when  the  essay  on  population  was  written  the 
prevailing  opinion  among  statesmen  of  all  shades  of 
politics  was  that  a  dense  population  was  the  surest 

inquiry,  as  well  as  to  some  extent  also  in  the  sciences  of  organic  nature. 
For  example,  the  facts  which  form  the  basis  of  the  Darwinian  doctrine  of 
species  had  not  only  been  often  noticed  before,  but,  as  Mr.  Darwin  shows, 
had  been  systematically  acted  on  by  breeders  and  others— in  fact,  made 
the  basis  of  an  art.  No  one,  however,  will  say  that  this  detracted  from 
the  originality  of  Darwin's  discoverv. 


OF  POPULATION. 

proof  of  national  prosperity,  and  the  encouragement  of 
population  the  first  duty  of  a  statesman.  As  the 
gentle  humorist  put  it,  the  honest  man  who  married 
early  and  brought  up  a  large  family  was  thought  to  do 
more  real  service  than  he  who  continued  single  and 
only  talked  of  population.  Under  the  influence  of  this 
delusion,  colonization1  was  discouraged,  as  tending  to 
depopulate  the  mother  country,  while  the  poor-laws, 
over  and  above  their  indirect  influence  in  undermining 
individual  providence,  placed  a  direct  premium  upon 
multiplication  ;  and  in  general  every  plan  for  the  im 
provement  of  society  was  approved  and  supported  just 
in  proportion  to  its  supposed  influence  in  augmenting 
the  numbers  of  the  people.  The  reasonings  of  Malthns 
went,  as  I  have  explained,  to  establish  a  conclusion  di 
rectly  opposite  to  this — to  show  that,  as  regards  the 
number  of  a  people,  the  danger  lay  on  the  side,  not  of 
deficiency,  but  of  excess ;  and  that,  therefore,  plans  of 
social  improvement  were  to  be  approved,  not  in  propor 
tion  as  they  tended  to  encourage  the  increase  of  popula 
tion,  but  in  proportion  as  they  tended  to  develop  those 
qualities  of  self  control  and  providence  on  which  its  re 
striction  within  due  limits  depends.2 


1  "  Emigration,"  says  Doctor  Johnson,  "  is  hurtful  to  human  happi 
ness,  for  it  spreads  mankind."     Dean  Tucker,  one  of  the  few  Englishmen 
\v-ho,  during  the  American  War  of  Independence,  favored  separation,  did 
so  expressly  on  the  ground  that  it  would  check  emigration.     See  his 
"Tracts,  "p.  206. 

2  It  by  no  means  follows  from  any  thing  that  has  been  said  above  that 
paucity  of  population  or  the  slowness  of  its  advances  is  to  be  taken  as  a 
proof  of  national  prosperity ;  or,  vice  versa,  that  a  numerous  or  rapidly 
increasing  population  is  inconsistent  therewith,  as  is  almost  invariably  as 
serted  or  implied  by  anti-Malthusian  writers.     Mr.  Rickards,  e.  g.,  says  : 
"  Mr.  Malthas  and  the  disciples  of  his  school  unite  in  representing  the 


THE  MALTHUSIAN  DOCTRINE 

Such  were  some  of  the  consequences  which  resulted 
in  social  and  political  theory  and  practice  from  the  great 

supposed  pressure  of  population  against  food  as  increasing  in  intensity  in 
direct  proportion  to  the  populousness  of  a  community;"  and,  after  giving 
the  number  of  inhabitants  to  the  square  mile  in  some  of  the  principal 
countries  in  the  world,  the  result  of  the  comparison  being  to  show  the 
greatest  density  of  population  in  England,  he  adds,  "  England,  therefore, 
is  the  country  in  which,  according  to  the  theory  in  question,  the  pressure 
of  over-population  ought  to  be  most  severe." — "Population  and  Capital," 
pp.  117,  118. 

It  is  evident  that  the  theory  in  question  involves  no  such  consequence, 
referring,  as  it  does,  to  the  relation  subsisting  between  population  and 
food,  and  asserting  nothing  whatever  respecting  the  absolute  amount  of 
either.  The  statement,  however,  is  not  simply  an  unwarrantable  inference  : 
it  amounts  to  a  direct  misrepresentation  of  Malthus,  since  it  imputes  to 
him  an  opinion  which  he  has  in  terms  disavowed — e.  g.,  "It  is  an  utter 
misconception  of  my  argument  to  infer  that  I  am  an  enemy  to  population, 
I  am  only  an  enemy  to  vice  and  misery,  and  consequently  to  that  unfa 
vorable  proportion  between  population  and  food  which  produces  these 
evils.  But  this  unfavorable  proportion  has  no  necessary  connection  with 
the  quantity  of  absolute  population  which  a  country  may  contain.  On 
the  contrary,  it  is  more  frequently  found  in  countries  which  are  very  thinly 
peopled  than  in  those  which  are  more  populous.  .  .  .  In  the  desirableness 
of  a  great  and  efficient  population,  I  do  not  differ  from  the  warmest  ad 
vocates  of  increase.  I  am  perfectly  ready  to  acknowledge,  with  the  writers 
of  old,  that  it  is  not  extent  of  territory,  but  extent  of  population,  that 
measures  the  power  of  states.  It  is  only  as  to  the  mode  of  obtaining  a 
vigorous  and  efficient  population  that  I  differ  from  them,  and  in  thus  dif 
fering  I  conceive  myself  entirely  borne  out  by  experience,  that  great  'test 
of  all  human  speculations." 

The  practical  difference  in  the  results  to  which  Malthusian  and  anti- 
Malthusian  views  lead  may  be  made  clearer  by  considering  how  they  would 
apply  in  a  given  c^se. 

The  stationary  state  of  population  in  France,  which  has  lately  been  made 
the  subject  of  much  remark,  Avould  probably  be  regarded  by  both  schools 
as  indicating  something  amiss  in  the  social  condition  of  that  country  ;  but 
while  the  anti-Malthusian  would  regard  it  as  the  source  of  the  disease,  the 
Malthusian  would  consider  it  as  merely  a  symptom,  and  a  symptom,  as 
far  as  it  went,  alleviative  of  the  disorder.  According  to  the  views  of  the 
former,  the  proper  cure  for  the  social  malady  would  be  to  encourage  pop 
ulation  by  offering  premiums  for  large  families,  or  by  throwing  the  respon 
sibility  of  providing  for  them  on  the  state.  I  do  not  say  that  any  one 
now  would  seriously  recommend  this  policy,  but  I  sayit  is  a  legitimate 


OF  POPULATION.  169 

work  of  Malthus.  It  appears  to  me  that,  in  following 
the  course  which  led  him  to  the  result  he  reached,  Mal- 
thus  followed  the  only  course  hy  which  important  eco 
nomic  truths  are  to  be  discovered.  You  will  observe, 
his  method  was  strictly  in  conformity  with  that  which  I 
have  been  recommending  in  these  lectures  as  the  scien 
tific  method  of  Political  Economy.  He  commenced  by 
considering  the  nature  and  force  of  a  known  principle 
of  human  nature :  he  took  account  of  the  actual  exter 
nal  conditions  under  which  it  came  into  operation ;  he 
traced  the  consequences  which  would  result  supposing  it 
to  operate  unrestrained  under  these  ascertained  condi 
tions  ;  he  then  inquired  how  far  in  fact  the  principle 
had  been  restrained  ;  and,  lastly,  investigated  the  nature 
of  the  antagonizing  agencies  through  the  operation  of 


consequence  from  anti-Malthusian  doctrines ;  it  was  universally  accepted 
as  such,  and  acted  on  as  such,  up  to  the  close  of  the  last  century ;  and  if 
the  same  policy  is  not  still  openly  advocated,  it  is  owing  to  the  influence 
which  the  writings  of  Mai  thus  have  exercised  even  among  those  who  af 
fect  to  repudiate  his  teaching. 

On  the  other  hand,  the  Malthusian  would  regard  the  stationariness  of 
population  in  France  as  an  alleviative  symptom  of  the  social  malady. 
That  population  does  not  advance  is,  indeed,  in  itself  (apart  from  other 
considerations)  an  evil — it  implies,  at  all  events,  a  certain  negation  of  hu 
man  happiness ;  but  it  is  better  that  population  should  not  advance  than 
that  it  should  advance  in  increasing  pauperism  and  wretchedness.  The 
Malthusian,  therefore,  would  consider  how  the  material  resources  of  France 
might  be  expanded,  and  her  means  of  supporting  population  increased ; 
but  he  would  carefully  abstain  from  encouraging  population,  because  he 
would  know  that,  owing  to  the  natural  strength  of  the  principle,  however 
great  might  be  the  expansion  of  her  resources,  population  would  advance 
at  least  as  fast  as  ivas  desirable.  On  the  contrary,  he  would  take  care, 
while  endeavoring  to  augment  her  means,  not  to  weaken,  but  rather  to 
strengthen,  those  prudential  habits  which  at  present  exist.  No  possible 
immediate  gain,  if  obtained  by  a  relaxation  in  this  respect,  would  be  con 
sidered  by  him  as  an  adequate  compensation  for  the  future  evils  which 
such  relaxation  would  entail. 

II 


170  TIIE  MALTHUSIAN  DOCTRINE 

which  tne  restraint  was  effected.  By  these  means  he  ar 
rived  at  the  ultimate  causes  in  the  principles  of  human 
nature,  and  the  facts  of  the  external  world  on  which  the 
condition  of  the  mass  of  mankind  in  the  matter  of  sub 
sistence  depends,  and  furnished  for  the  first  time  the  so 
lution  of  an  important  problem  in  the  laws  of  the  dis 
tribution  of  wealth. 

§  3.  So  much,  then,  for  the  doctrine  of  Maltlms;  and 
now  for  his  opponents.  One  of  the  most  prominent  of 
the  writers  who  have  recently  taken  the  field  against  him 
is  Mr.  Rickards,  late  Professor  of  Political  Economy  at 
Oxford.  Of  his  work  on  "  Population  and  Capital  "  the 
chief  portion  is  devoted  to  an  elaborate  attack  on  the 
position  of  Malthas.  The  objections  advanced  by  Mr. 
Rickards  are  not  absolutely  new,1  but  they  are  stated  by 
him  with  greater  fullness  and  clearness  than  I  have  seen 
them  elsewhere,  and  I  shall,  therefore,  avail  myself  of 
his  statement  of  them.  The  following  passage  is  taken 
from  the  work  just  referred  to: 

"  It  is  obvious  that  there  arc  two  methods  by  which  the 
respective  rates  of  increase  of  man  and  of  subsistence  may 
be  comparecPVThey  may  be  regarded — I  mean,  of  course, 
both  the  one  a»4*4lie  other — cither  in  the  abstract  or  in 
the  concrete ;  either  potentially  or  practically.  We  may 
investigate,  for  instance,  according  to  the  laws  of  nature 
manifested  by  experience,  what  is  the  stated  period  within 
which  a  given  society  of  human  beings  are  physically  ca 
pable  of  doubling  their  numbers,  abstracting  the  operation 
of  those  checks  that  impaired  longevity  and  increased  mor- 


1  See  Lawson's  "  Lectures  on  Political  Economy  ;"  also  Laing's  "  Trav 
els  in  Europe,"  chap.  iii. 


OF  POPULATION.  171 

tality  which  may  be  found  practically  keeping  down  the 
number  of  any  society.  On  the  other  hand,  we  may  esti 
mate  the  potential  rate  of  increase  of  those  animals  or  sub 
stances  which  are  adapted  for  human  subsistence,  assum 
ing  no  obstacle  to  their  multiplication  to  arise  from  the 
difficulty  of  finding  hands  to  rear  or  space  upon  the  earth 
to  nourish  them.  13y  this  method  we  may  ascertain  which 
of  the  two  elements,  population  or  subsistence,  is  physical 
ly  capable  of  the  greater  expansion  in  a  given  time.  Or 
we  may  adopt  another  mode  of  testing  their  relative  rates 
of  increase — we  may  compare  the  progress  of  man  and  of 
production  in  the  actual  state  of  any  community,  or  of  all 
communities  together.  In  all  existing  societies  there  are 
checks  in  operation  upon  the  multiplication  of  the  human 
species.  There  are  checks,  likewise,  upon  the  indefinite  in 
crease  of  the  animal  and  vegetable  world.  We  may  take 
the  operation  of  the  checks  into  account  on  both  sides  of 
our  calculation.  In  any  given  country,  or  in  the  world  at 
large,  if  we  like  it  better,  we  may  compute,  with  reference 
to  the  actual  state  of  things — looking  to  the  experience  of 
the  past,  and  to  the  circumstances  of  the  present,  to  all 
the  causes,  social,  moral,  or  political,  which  restrain  the 
propagation  both  of  man  and  of  his  food — what  has  actual 
ly  been,  or  what  probably  may  be  henceforward,  the  com 
parative  rates  of  increase  of  population  and  of  production. 
Either  of  these  two  methods  of  comparison  would  be  fair 
and  logical.  I  need  scarcely  add  that  the  latter  will  be 
more  likely  to  conduce  to  a  useful  practical  conclusion.} 
But  a  third  method,  which  can  not  fail  to  lead  us  by  the!  \  * 
road  of  false  logic  to  an  utterly  wrong  result,  is  that  of  » 
comparing  the  potential  increase  of  mankind,  according  to< 
the  unchecked  laws  of  nature,  with  the  actual  progress  in 
any  given  country  of  production,  excluding  the  operation 
of  the  counteracting  forces  on  the  one  side,  importing  them  '; 
into  the  estimate  on  the  other.  It  is  no  wonder,  when  we  f 
use  such  a  balance  as  this,  if  the  scales  are  found  to  hang 
prodigiously  unequal.  .  .  . 

"  But  it  requires  nothing  more  than  a  careful  attention 


172  TI1E  MALTUUSIAN  DOCTRINE 

to  this  point  to  bring  out  in  a  clear  point  of  view  the  fun 
damental  fallacy  of  the  whole  argument.  What  is  that  ra 
tio  in  regard  to  the  multiplication  of  subsistence  which  Mr. 
Malthus  has  placed  in  contrast  with  the  potential  increase 
of  human  beings  ?  JVot  the  potential  increase  of  animal 
and  vegetable  existences  proper  for  the  food  of  men  under 
the  like  favorable  conditions  ;  '  the  power  left  to  exert  it 
self  with  perfect  freedom,'  limited  by  no  check  or  obstacle, 
which  formed  his  datum  in  regard  to  population.  lie  en 
ters  into  no  estimate  as  to  the  periods  in  which,  accord 
ing  to  the  laws  of  nature,  the  fruits  of  the  earth,  the  corn, 
the  olive,  and  the  vine,  are  capable — it  is  vain  to  talk  of 
duplication  in  such  cases,  but — of  multiplication,  some  thir- 
tyfold,  some  sixtyfold,  some  a  hundredfold.  He  omits  to 
consider  the  almost  marvelous  fecundity  of  some  of  those 
animals  which  form,  in  civilized  communities,  the  chief 
subsistence  of  the  mass  of  the  people.  .  .  .  His  calcula 
tion  as  to  the  ratio  in  which  subsistence  may  be  multiplied 
is  founded  upon  the  state  of  things  then  actually  existing 
in  England.  He  compares  the  abstract  with  the  concrete 
—  nature,  in  the  region  of  hypothesis,  acting  in  'perfect 
freedom,'  with  nature  obstructed  by  all  the  '  checks'  which 
restrain  production  in  the  actual  world."1 

The  first  point  to  be  remarked  upon  in  this  is  that  Mr. 
Rickards  does  not  here  deny  the  doctrine  of  Malthus  in 
the  sense  in  which  Malthus  asserted  that  doctrine — he 
admits  that  in  this  sense  "  the  scales"  do  "  hang  prodig 
iously  unequal ;"  nor  does  he  impugn  the  reasoning  by 
which  Malthus  deduced  from  the  doctrine  thus  under 
stood  the  conclusions  which  it  was  the  object  of  his  es 
say  to  establish:  in  short,  he  neither  denies  the  premises 
of  the  Malthusian  argument,  nor  their  sufficiency  to  es 
tablish  the  Malthusian  conclusion.  The  passage,  there- 

1  "Population  and  Capital, "pp.  G8-70,  73,  75_ 


OF  POPULATION.  173 

fore,  which  I  have  quoted,  if  it  be  intended  as  any  thing 
more  than  a  verbal  criticism  on  the  form  in  which  the 
meaning  of  Mai  thus  is  expressed,  must  be  regarded  as 
an  example  of  the  fallacy  called  ignoratio  elenclii;  and 
if  my  object  were  simply  to  defend  the  Malthusian  doc 
trine,  I  might  at  once  pass  by  these  objections  as  irrele 
vant.  As  an  example,  however,  of  the  confused  notions 
which  prevail  respecting  economic  method,  it  will  be  de 
sirable  to  consider  them  somewhat  more  at  length. 

I  propose,  therefore,  to  show  that,  while  the  compari 
son  instituted  by  Malthus  is  perfectly  legitimate  and  log 
ical,  those  suggested  by  Mr.  Rickards  are  wholly  irrele 
vant  to  the  ends  of  economic  science,  inasmuch  as,  wheth 
er  concluded  in  the  affirmative  or  negative,  they  illustrate 
no  economic  principle  whatever,  and  afford  us  no  assist 
ance  in  solving  any  problem  presented  by  the  phenom 
ena  of  wealth. 

And  here  I  may  remark  in  passing  that,  granting  for 
the  moment  that  a  comparison  of  the  abstract  with  the 
concrete  be  inadmissible,  the  criticism  may  be  at  once 
obviated  by  substituting  for  the  word  "  subsistence  "  the 
expression  "  capacity  of  the  soil  to  yield  subsistence," 
which  equally  well  conveys  the  meaning  of  Malthus. 
Y^e  may  then  compare  the  abstract  with  the  abstract, 
the  "  potential  fecundity"  of  man  with  the  "potential" 
fertility  of  the  soil ;  and  we  may  deduce  from  the  prop 
osition  thus  stated  precisely  the  same  conclusions  which 
it  was  the  object  of  Malthus  to  inculcate.1 

1  Mr.  Rickards,  in  fact,  elsewhere  states  the  question  in  this  \vay :  "Now, 
precisely  the  same  assumption — that  of  the  diminishing  productiveness  of 
the  land  as  compared  with  the  undiminished  power  of  human  fecundity — 
forms  the  basis  of  the  Malthusian  theory." — "Population  and  Capital," 
p.  127. 


THE  MALTIIUSIAN  DOCTRINE 

But  why,  let  us  ask,  should  a  comparison  of  the  ab 
stract  with  the  concrete  be  necessarily  illogical  ?    I  know 
of  no  criterion  by  which  to  decide  on  the  propriety  of  a 
comparison  except  by  reference  to  the  object  for  which 
the  comparison  is  instituted.    The  object  which  Mai  thus 
had  in  view  in  writing  his  essay  was  to  ascertain  the  in 
fluence  of  the  principle  of  population  upon  human  well- 
being  ; l  to  ascertain  whether  the  natural  force  of  the 
principle  was  such  that,  with  a  view  to  the  happiness  of 
mankind,  it  should  be  stimulated  or  restrained ;  whether 
it  was  desirable  that  inducements  should  be  held  out 
tending  to  encourage  early  marriages  and  large  families ; 
or,  on  the  contrary,  whether  we  should  favor  those  insti 
tutions  and  usages  of  society  of  which  the  tendency  is 
to  develop  the  virtues  of  prudence  and  moral  restraint 
in  the  relations  of  the  sexes.    This  was  clearly  and  prop 
erly  an  economic  question — it  was  a  question  as  to  the 
influence  of  a  given  principle  on  the  distribution  of 
wealth ;  and  it  was  one  which,  from  the  terms  in  which 
it  is  stated,  evidently  involved  the  very  comparison  to 
which  Mr.  Rickards  objects — a  comparison  of  the  natu 
ral  and  inherent  force  of  the  principle  of  population  with 
the  actual  means  at  man's  disposal,  situated  as  he  is  in 
the  world,  for  obtaining  subsistence  —  a  comparison  of 
"  nature  in  the  region  of  hypothesis,  acting  with  perfect 
freedom,  with  nature  obstructed  by  all  the  checks  which 

1  u  To  enter  fully  into  this  question,  and  to  enumerate  all  the  causes 
that  have  hitherto  influenced  human  improvement,  would  be  much  beyond 
the  power  of  an  individual.  The  principal  object  of  the  present  essay  is 
to  examine  the  effects  of  one  great  cause  intimately  united  with  the  very 
nature  of  man;  which,  though  it  has  been  constantly  and  powerfully  oper 
ating  since  the  commencement  of  society,  has  been  little  noticed  by  writers 
who  have  treated  this  subject." — Malthus,  "Essay  on  Population,"  p.  2. 
ed.  1807. 


OF  POPULATION.  175 

restrain  production  in  the  actual  world."  Mr.  Rickards, 
therefore,  either  must  maintain  that  the  problem  which 
Mai  thus  proposed  to  solve — the  influence  of  the  princi 
ple  of  population  upon  human  well-being — upon  the  dis 
tribution  of  wealth — was  not  a  legitimate  problem,  or 
he  must  admit  that  a  comparison  of  the  abstract  with 
the  concrete  is  not  an  improper  comparison. 

Indeed,  if  the  consideration  of  the  tendency  of  a 
given  principle  —  its  "potential"  capacity  —  in  connec 
tion  with  the  "actual"  circumstances  under  which  it 
comes  into  operation,  is  to  be  proscribed  as  involving 
a  comparison  of  the  abstract  with  the  concrete,  it  is 
difficult  to  imagine  how  the  complex  phenomena  of 
nature  are  to  be  investigated,  and  traced  to  the  various 
causes  producing  them. 

But,  further,  I  maintain  tha't  neitlier  of  the  compar 
isons,  insisted  on  by  Mr.  Rickards  as  being  the  only 
legitimate  comparisons,  can  lead  to  the  discovery  of 
any  economic  principle  whatever,  or  help  us  to  the 
solution  of  any  economic  problem.  The  first  of  the 
comparisons  suggested  by  Mr.  Rickards  as  that  which 
Malthus  might  properly  have  instituted  is  the  compar 
ison  of  population  in  the  abstract  with  food  in  the  ab 
stract —  the  "potential"  increase  of  the  one  with  the 
"  potential "  increase  of  the  other — in  a  word,  the  com 
parison  of  the  fecundity  of  a  human  pair  with  the  fe 
cundity  of  a  grain  of  wheat.  Had  he  instituted  this 
comparison,  he  would,  says  Mr.  Rickards,  have  done 
that  which  at  least  "  was  logical  and  fair,"  and,  we 
may  safely  admit,  would  have  been  led  to  no  conclu 
sion  that  could  have  disturbed  the  serenity  of  the  most 
orthodox  philosopher. 


176  TIIE   MALTIIUSIAN  DOCTRINE 

There  can  be  no  doubt  that  the  capacity  of  increase 
in  a  grain  of  wheat  (the  conditions  most  favorable  to 
its  cultivation  being  assumed)  is  immeasurably  greater 
than  the  capacity  of  increase  in  mankind  (the  condi 
tions  most  favorable  to  their  multiplication  being  also 
assumed) ;  inasmuch  as  while  population  under  the 
most  favorable  circumstances  takes  twenty  or  twenty- 
five  years  to  double  itself,  a  grain  of  wheat  in  rich  soil 
may  yield  twenty  or  thirty  or  forty  fold  in  a  year ;  and 
it  is  quite  possible  that  in  a  work  on  the  comparative 
physiology  of  plants  and  animals  this  fact  may  possess 
some  importance.  But  the  question  for  a  political 
economist  is,  what  economic  principle  can  be  deduced 
from  it  ?  What  light  does  it  throw  on  the  class  of 
problems  with  which  he  has  to  deal  ?  Mr.  Rickards 
will  perhaps  reply  —  it  follows  from  the  comparison 
that  subsistence  tends  to  increase  faster  than  popula 
tion.  Understood  in  the  sense  Malthus  affixed  to  the 
terms,  this  proposition  would  represent  an  important 
tendency  influencing  the  phenomena  of  wealth  —  in 
other  words,  an  economic  law :  were  it  true  in  this 
sense  that  "subsistence  tended  to  increase  faster  than 
population,"  all  the  inferences  which.  Malthus  drew 
from  the  opposite  principle,  and,  I  may  add,  most  of 
the  doctrines  of  Political  Economy  as  they  are  received 
at  present,  might  be  reversed  ;  nay,  the  most  important 
phenomena  of  society  as  it  is  at  present  constituted 
would  be  inexplicable.  But,  when  understood  as  Mr. 
Rickards  insists  on  understanding  it,  the  bearing  of  the 
proposition  on  economic  problems  is  not  obvious.  Let 
us  test  it  by  actual  trial.  Assuming,  as  is  undoubtedly 
the  case, that  the  abstract  capacity  of  increase  in  a  grain 


OF  POPULATION.  177 

of  corn  is  greater  than  the  abstract  capacity  of  increase 
in  a  human  pair,  and  that  in  this  sense  subsistence  tends 
to  increase  faster  than  population  —  in  what  manner 
does  the  fact  here  asserted  affect  human  interests  in 
their  economic  aspects  ?  What  phenomenon  of  wealth 
does  it  explain  ?  What  practical  lesson  does  it  afford? 
Does  it  throw  any  light  on  the  causes  on  which  the 
progress  and  physical  well-being  of  society  depend  ? 
Does  it  explain  why  rent  tends  to  rise  and  profits  to 
fall  as  society  advances?  Why  the  English  laborer 
receives  less  than  the  American,  and  more  than  the 
Hindu?  Why  old  countries  import  raw  produce  and 
export  manufactured  articles,  while  new  countries  re 
verse  this  process?  Does  it  explain  why,  as  civiliza 
tion  advances,  the  condition  of  the  mass  of  the  people 
generally  improves  ?  Not  one  of  these  questions  can 
be  completely  answered  without  reference  to  the  doc 
trine  of  population  as  Malthus  stated  and  understood 
that  doctrine  ;  but  if,  with  Mr.  Rickards  and  those  who 
agree  with  him,  we  are  to  understand  the  doctrine  as 
expressing  a  comparison  of  the  tendency  to  increase  in 
human  beings,  not  with  the  actual  means  at  their  dis 
posal  for  obtaining  subsistence,  but  with  the  capacity 
of  increase  in  the  vegetable  world  under  impossible 
conditions,  I  can  not  find  that  it  helps  us  in  any  way  to 
the  solution  of  these  or  any  other  economic  problems. 

I  defined  an  economic  law  (as  you  will  probably  re 
member)  as  a  proposition  expressing  a  tendency  de 
duced  from  the  principles  of  human  nature  and  ex 
ternal  facts,  and  affecting  the  production  or  distribu 
tion  of  wealth.  The  comparison  instituted  between 
population  and  subsistence  by  Mr.  Rickarda  certainly 

112 


THE  MALTIIUSIAN  DOCTRINE 

expresses  a  tendency  deduced  from  human  nature  and 
external  facts,  but  is  wanting  in  the  other  condition  of 
an  economic  law,  as  I  have  ventured  to  define  it :  it 
expresses  no  tendency  affecting  the  production  and  dis 
tribution  of  wealth.  I  can  not,  therefore,  see  on  what 
ground  it  is  entitled  to  the  place  which  Mr.  Rickards 
would  assign  it. 

The  other  comparison  suggested  by  our  author  as  one 
that  might  properly  be  instituted  (and  to  it  he  appears 
to  attach  most  importance)  is  the  comparison  of  "  popu 
lation  in  the  concrete "  with  ^  subsistence  in  the  con 
crete  " — the  comparison,  that  is  to  say,  of  the  progress 
which  has  actually  taken  place  in  the  population  of  a 
given  district  during  a  given  time,  with  the  progress 
which,  in  the  same  district  and  during  the  same  time, 
has  taken  place  in  subsistence.  Now  I  am  far  from 
saying  that  such  a  comparison  may  not  bring  to  light 
facts  of  a  valuable  character — facts  which,  if  duly  re 
flected  upon  and  interpreted  by  the  light  of  economic 
science,  may  lead  to  important  conclusions,  and  possi 
bly  to  the  discovery  of  some  new  economic  principle ; 
but  I  entirely  deny  that  a  proposition,  embodying  the 
crude  results  of  this  comparison,  can  be  considered  as 
a  portion  of  Political  Economy,  or  that  it  possesses  any 
of  the  attributes  of  an  economic  law. 

It  is  true,  indeed,  that  the  term  "law"  is  frequently 
applied  to  mere  generalizations  of  complex  phenorn- 
'ena  —  to  propositions  which  simply  express  the  order 
in  which  facts  have  been  observed  to  occur ;  and  pro 
vided  the  purely  empirical  character  of  such  general 
izations  be  borne  in  mind,  there  can  be  no  objection 
to  the  name.  Even  in  this  sense,  however,  to  entitle 


OF  POPULATION.  179 

a  proposition  to  the  character  of  a  "  law,"  some  degree 
of  regularity  and  uniformity  in  the  observed  sequence 
is  required.  Now,  with  respect  to  the  comparison 
which  Mr.  Rickards  proposes  to  institute  between  the 
relative  advances  which  have  taken  place  in  popula 
tion  and  subsistence,  no  such  uniformity  or  regularity 
is  observable.  In  some  nations  subsistence  has  ad 
vanced  more  rapidly  than  population ;  in  others  popu 
lation  has  advanced  more  rapidly  than  subsistence  ;  and 
in  the  same  nation  at  different  times  the  results  have 
been  different,  population  and  subsistence  taking  the 
lead  by  turns.  The  utmost  that  can  be  said  with  truth 
is  that,  on  the  whole,  as  nations  advance  in  civilization, 
the  proportion  generally  alters  in  favor  of  subsistence 
— a  proposition  which,  I  think,  can  scarcely  pretend  to 
the  dignity  of  a  "  law,"  even  in  the  loosest  sense  of  that 
word. 

But  even  if  we  were  to  suppose  the  relative  advance 
of  population  and  subsistence  to  be  constant  and  uni 
form,  and  the  rate  to  be  well  ascertained,  I  should  still 
deny  that  a  proposition  embodying  the  results  of  this 
comparison  could  correctly  be  called  a  doctrine  of  Po 
litical  Economy  ;  that  is  to  say,  I  should  deny  that  such 
a  proposition  could  with  propriety  be  placed  in  the 
same  category  of  truths  with  those  which  assert  that 
within  the  range  of  effective  competition  normal  value 
is  governed  by  cost  of  production  ;  that  fluctuations  in 
value  are  governed  by  the  conditions  of  demand  and 
supply  in  relation  to  the  particular  commodity ;  that 
the  rate  of  profit  varies  inversely  with  proportional 
wages  as  understood  by  Eicardo  ;  that  "economic  rent" 
depends  on  the  difference  in  the  returns  of  the  soil  to 


130  THE  MALTHUSIAN  DOCTRINE 

different  capitals ;  in  a  word,  with  the  most  important 
principles  of  economic  science.  Each  of  these  propo 
sitions  expresses  some  tendency  affecting  the  produc 
tion  and  distribution  of  wealth ;  they  have  all  been  de 
duced  from  known  principles  of  human  nature  and  as 
certained  physical  facts ;  and  they  are  all  available  in 
explanation  of  the  phenomena  of  wealth.  But  a  prop 
osition  asserting  the  results  (even  supposing  these  re 
sults  to  be  perfectly  regular  and  uniform)  of  a  compar 
ison  between  population  in  the  concrete, and  food  in  the 
concrete,  possesses  none  of  these  attributes.  It  does  not 
express  any  tendency  influencing  the  phenomena  of 
wealth,  but  exhibits  the  composite  result  and  evidence 
of  many  tendencies ;  it  is  not  deduced  from  the  prin 
ciples  of  human  nature  and  external  facts,  but  from  the 
statistics  of  society,  or  from  the  crude  generalizations 
of  history ;  and,  lastly,  it  is  not  a  principle  helping  us 
to  the  solution  of  any  of  the  problems  of  our  complex 
civilization,  but  itself  presents  a  complex  problem  for 
our  solution. 

I  say  that  such  a  comparison  will  not  help  us  to  the 
solution  of  any  of  the  problems  of  our  complex  civiliza 
tion  ;  for,  granting  the  fact  to  be  as  Mr.  Bickards  asserts 
it  to  be,  and  as,  on  the  whole,  making  large  allowance 
for  exceptional  cases,  I  believe  it  is— granting  that,  as  a 
general  rule,  the  means  of  subsistence,  and  we  may  add 
the  comforts  and  luxuries  of  life,  have  advanced  in  civ 
ilized  communities  more  rapidly  than  population,  what 
light  does  this  throw  either  upon  the  influence  of  the 
principle  of  population  on  the  one  hand,  or  of  the  causes 
regulating  the  production  of  subsistence  on  the  other — 
of  their  influence,  I  say,  upon  the  progress  of  society 


OF  POPULATION.  181 

and  the  phenomena  of  wealth  ?  All  that  we  are  war 
ranted  in  inferring  from  the  state  of  things  assumed  is 
the.  predominance  on  the  whole  in  the  given  circumstan 
ces  of  the  causes  tending  to  advance  over  those  tending 
to  retard  the  social  or  economic  condition  of  a  nation; 
but  it  affords  no  ground  for  inference  respecting  the 
character  or  inherent  strength  of  any  particular  cause 
affecting  that  condition — such  as  the  principle  of  popu 
lation.  The  fact  of  the  arrival  of  a  vessel  in  New  York 
is  no  proof  that  she  had  the  wind  in  her  favor :  she  may 
have  had  recourse  to  steam  to  counteract  its  effects.  The 
speed  at  which  she  travels  and  the  direction  of  her 
course  do  not  depend  upon  the  force  of  the  steam  im 
pelling,  or  of  the  winds  assisting,  or  of  the  currents 
thwarting,  or  of  the  friction  impeding,  but  is  "  the  last 
result  and  joint  effect  of  all."  Such,  also,  is  the  progress  , 
of  society.  It  represents  the  result  of  a  vast  number  of  / 
forces,  physical,  intellectual,  social,  and  moral ;  and  it ! 
advances  or  recedes  or  oscillates  as  one  kind  or  other 
prevails.  But  from  the  mere  consideration  of  the  rough 
result,  the  general  total,  it  would  be  as  vain  to  attempt 
to  deduce  the  character  or  tendency  of  any  single  cause 
affecting  it  —  of  any  given  economic  principle  —  as  it 
would  be  to  elicit  a  theory  of  the  Atlantic  currents  from  ; 
the  statistics  of  voyages  between  Liverpool  and  New  • 
York. 

Mr.  Rickards,  however,  holds  that  the  comparison 
which  we  have  been  considering  does  throw  light  on  the 
causes  of  economic  phenomena.  The  actual  advance 
which  the  various  communities  have  made  in  material 
improvement,  proves,  according  to  him,  "  the  natural  as 
cendency  of  the  force-  of  production  over  the  force  of 


182  THE  MALTHUSIAN  DOCTRINE 

population."  "  It  can  Lave  emanated,"  he  says,  "  from 
no  other  source.  The  primitive  possessors  of  the  earth 
were  destitute  of  all  things.  The  earth  has  been  the 
source  of  all  the  wealth  which  has  accumulated  in  the 
hands  of  their  descendants.  ...  If,  while  the  number  of 
cultivators  has  gone  on  increasing,  this  surplus  has  be 
come  greater  and  greater,  and  the  whole  people  wealth 
ier,  it  must  follow  that  production  has  a  tendency  to  in 
crease  more  rapidly  than  population,  and  that  the  accu 
mulation  of  wealth  which  accompanies  the  progress  of 
society  is  attributable  to  this  cause." 1 

In  order  to  the  cogency  of  the  argument  it  is  obvi 
ously  necessary  that  the  terms  "force  of  production" 
and  "  force  of  population  "  should  include  all  the  causes 
influencing  the  economic  progress  of  society;  and  in  this 
sense  to  say  that  the  force  of  production  is  superior  to 
the  force  of  population  is  only  in  other  words  to  say 
that  the  causes  tending  to  advance  society  are  on  the 
whole  more  powerful  than  the  causes  tending  to  re 
tard  it ;  the  name  "  force  of  production "  being  given 
to  the  one  set  of  causes,  and  that  of  "force  of  popula 
tion  "  to  the  other.  It  is,  in  short,  a  mere  reproduction 
of  the  fact  of  progress  under  another  form,  but  does  not 
advance  us  a  step  toward  an  explanation  of  that  fact 
which  is  the  problem  to  be  solved.  It  is  as  if  a  person 
should  argue  that  the  fact  of  a  train  leaving  Dublin  and 
arriving  in  Belfast  proves  the  ascendency  in  railways  of 
the  "  force  of  locomotion  "  over  the  "  force  of  immobil 
ity,"  on  the  ground  that  the  actual  progress  of  the  train 
could  be  due  to  no  other  cause;  and  the  argument 

1P.  115. 


OF  POPULATION.  183 

would  be  valid — a  similar  assumption  being  made  to 
that  latent  in  the  reasoning  I  have  quoted,  namely,  that 
the  "  force  of  locomotion  "  included  all  the  causes  pro 
pelling  the  train,  and  the  "  force  of  immobility  "  all  the 
causes  retarding  it.  The  engineer,  however,  who  should 
make  the  discovery  would  scarcely  find  that  he  had  add 
ed  much  to  his  stock  of  useful  knowledge. 

§  4.  I  have  now  endeavored  to  show  that  the  compar 
isons  suggested  by  Mr.  Rickards  in  lieu  of  that  which 
Maltlius  instituted,  lead  to  no  economic  principle  what 
ever,  and  furnish  no  aid  toward  the  solution  of  any  prob 
lems  connected  with  the  phenomena  of  wealth.  In  fur 
ther  proof  of  the  entire  irrelevancy,  with  reference  to 
the  ends  of  the  science,  of  Mr.  Rickards's  exposition  of 
the  laws  of  population,  I  may  add  that,  having  estab 
lished  these  laws,  apparently  to  his  own  satisfaction,  he 
nevertheless  does  not  apply  them  to  the  solution  of  any 
problems  of  wealth,  nor  does  he  attempt  to  make  them 
the  ground  of  any  practical  suggestions ;  on  the  contra 
ry,  such  practical  lessons  as  he  does  inculcate  on  the  sub 
ject  of  population  are  directly  at  variance  with  his  own 
theoretical  conclusions. 

You  have  seen  that,  while  Malthas  maintained  that 
population  tended  to  increase  faster  than  subsistence,  he 
held,  consistently  with  this,  that  the  principle  of  popula 
tion  was  a  power  which  it  was  desirable  to  restrain,  and 
advocated,  as  a  means  to  this  end,  the  formation  of  hab 
its  of  prudence  and  self-control.  Mr.  Rickards,  as  you 
have  also  seen,  emphatically  denies  this  doctrine :  he 
maintains,  on  the  contrary,  that  subsistence  tends  to  in 
crease  faster  than  population — that  it  does  so  both  in  the 


184  THE  MALTIIUSIAN  DOCTRINE 

"  abstract "  and  in  the  "  concrete,"  both  "  potentially  " 
and  "  actually ;"  and,  further,  that  "  production  "  as  com 
pared  with  "  population  "  is  "  the  greater  power  of  the 
two."  Mr.  Rickards  having  thus  given  a  direct  negative 
to  the  principle  of  Malthus,  it  would  be  natural  to  sup 
pose  that  in  the  practical  treatment  of  the  question  lie 
would  be  equally  at  variance  with  him.  It  would  be 
natural  to  suppose  that,  as  he  maintains  that  subsistence 
both  "  potentially  "  and  "  actually  "  tends  to  outstrip  pop 
ulation,  he  would  be  released  from  all  apprehension  as 
to  the  danger  of  population  outstripping  subsistence.  If 
"production"  be  the  "superior  power,"  there  seems  no 
reason — provided  only  men  be  industrious,  provided  only 
the  machinery  of  production  be  kept  in  motion  —  that 
mankind  should  not  multiply  without  stay  or  limit,  since, 
on  this  hypothesis,  it  is  always  competent  to  them  to 
keep  the  means  of  physical  comfort  in  advance  of  their 
increase.  There  seems  no  reason,  in  short,  that  the  popu 
lation  of  every  country  in  Europe  should  not  advance  at 
the  American  rate,  constantly  doubling  itself  in  periods 
of  twenty-five  years ;  or,  at  least,  if  there  be  any  reason 
for  restraining  population,  we  should  not  expect  to  find 
it  in  the  difficulty  of  procuring  subsistence.  You  will, 
therefore,  probably  be  surprised  to  find  that  Mr.  Rick 
ards  not  only  recognizes  the  necessity  of  placing  a  re 
straint  on  the  principle  of  population,  but  does  so  on  the 
express  ground  of  the  limits  placed  by  nature  on  the  in 
crease  of  subsistence. 

"  Individual  prudence,"  he  says,1  "  is  the  proper  check 
to  precipitate  marriages ;  an  appeal  to  the  consequences 

1  r.  204. 


OF  POPULATION.  185 

which  will  recoil  on  the  parties  themselves  and  their  in 
nocent  offspring  is  the  appropriate  and  cogent  argu 
ment  to  deter  them  from  rash  engagements.  Let  it  not 
be  said,"  he  continues, "  that  in  thus  arguing  I  am  sub 
stituting  a  principle  of  selfishness  for  one  of  duty.  It 
is  not  so :  prudence  is  here  an  obligation  of  morality." 
..."  Whatever  fluctuations,"  he  adds,  "  may  betide  the 
labor  market,  let  each  man,  in  forming  his  private  con 
nections,  act  with  the  forethought  and  discretion  that 
become  a  responsible  being,  and  society  will  have  no 
cause  of  complaint  against  him,  for  over-population  will 
be  impossible."  This  is  excellent  advice.  But  what  are 
the  grounds  of  it  ? — why  should  "  over-population  "  be 
possible  in  the  absence  of  forethought  and  discretion? 
why  should  prudence  in  respect  to  marriage  be  an  ob 
ligation  of  morality  ?  Simply,  Mr.  Eickards  tells  us, 
quoting  the  language  of  M.  Say  (not  to  refute,  but  to 
adopt  it),  because  "  the  tendency  of  men  to  reproduce 
their  kind,  and  their  means  of  doing  so,  are,  we  may  say, 
infinite;  but  their  means  of  subsistence  are  limited."1 

I  must  leave  Mr.  Eickards  to  reconcile  his  practical 
lessons  with  his  theoretical  conclusions — his  advocacy  of 
a  restraint  on  population  on  the  ground  of  the  limitation 
of  subsistence,  with  his  doctrine  that  subsistence  "  poten 
tially"  and  "actually"  tends  to  increase  faster  than 
population.  It  appears  to  me  that  the  conclusion  is  in 
evitable — either  his  doctrines,  in  the  sense  in  which  he 
understands  them,  are  irrelevant  to  the  purposes  of  Po 
litical  Economy,  or  his  precepts  are  in  direct  contraven 
tion  of  his  doctrines. 


TIIE  MALTHUSIAN  DOCTRINE 

Before  concluding,  I  must  notice  one  more  position  of 
Mr.  Rickards.  In  the  preface  to  the  work  which  I  have 
been  noticing  he  puts  this  dilemma :  "  If  the  conclusion 
of  the  Essay  on  Population  be  true,  it  seems  to  me  to  in- 
Tolve  this  inevitable  consequence  —  that  there  has  been 
a  miscalculation  of  means  to  ends  in  the  arrangements 
of  the  universe — either  man  has  been  made  too  prolific, 
or  the  earth  too  sterile."1  Let  us  meet  this  argument 
frankly.  The  conclusion  of  Malthus  does  undoubtedly 
involve  the  consequence  that  the  earth  is  too  sterile  for 
the  fecundity  of  man — for  the  possible  increase  of  man 
kind  ;  the  earth  can  not  forever  yield  food  as  fast  as  hu 
man  beings  can  multiply ;  neither  in  this  case  nor  in 
any  other  has  provision  been  made  for  the  unlimited 
gratification  of  any  human  propensity.  Not  even  the 
most  amiable  instinct,  not  even  the  instinct  of  compas 
sion,  can  be  released  from  the  control  of  prudence  and 
conscience  without  entailing  injury  alike  on  the  possess 
or  and  on  society.  Whether  this  be  a  ground  for  charg 
ing  the  Creator  of  the  universe  with  a  "  miscalculation  of 
means  to  ends  "  it  is  not  for  me  to  say ;  but  the  fact,  I 
apprehend,  is  indisputable.  If  it  be  an  "  end  "  of  cre 
ation  that  the  human  species  should  multiply  unre 
strained,  the  conditions  under  which  man  has  been 
placed  in  the  world  do  not,  it  must  be  confessed,  seem 
well  calculated  for  this  purpose,  and  "  the  arrangements 
of  the  universe  "  do  certainly,  on  this  hypothesis,  seem 
liable  to  the  charge  conveyed  in  the  passage  I  have 

1  "'Wherever  Providence  brings  mouths  into  the  world,  it  will  find 
wherewithal  to  feed  them;'  the  profane  form  of  the  theory,"  says  the 
Cambridge  Don,  "is  that  you  ought  to  marry,  because  your  relations 
can't  let  you  starve. " 


OF  POPULATION.  1ST 

quoted.  For  my  part,  I  do  not  take  this  view  of  the 
"  ends  "  for  which  "  the  arrangements  of  the  universe  " 
have  been  planned ;  but,  as  apparently  Mr.  Bickards 
does,  I  must  leave  him  to  reconcile  it  as  he  best  can 
with  those  precepts  of  prudence  directed  against  "  over 
population"  which  he  has  had  the  practical  wisdom  to 
inculcate. 


LECTURE  VIII. 

OF  THE  THEORY  OF  RENT. 

§  1.  OF  those  principles  of  Political  Economy  which 
have  of  late  years  been  made  the  subject  of  controversy 
among  economists,  one  of  the  most  fundamental  and  im 
portant  is  the  theory  of  rent,  generally  designated  from 
the  name  of  its  ablest  expounder,  Mr.  Eicardo.  Mr. 
Rickards,  of  Oxford,  some  of  whose  objections  to  the 
doctrine  of  population,  as  taught  by  Malthus,  I  consid 
ered  in  my  last  lecture,  is  also  an  opponent  of  Ricardo's 
theory  of  rent.  In  the  sixth  lecture  of  his  work  on 
Population  and  Capital  he  remarks  upon  the  close  rela 
tion  which  exists  between  these  two  doctrines.  "The 
arguments  for  both,"  he  says,  "  rest  on  one  and  the  same 
hypothesis."  ..."  The  same  assumption — that  of  the  di 
minishing  productiveness  of  the  land  as  compared  with 
the  nndiminished  power  of  human  fecundity — forms  the 
basis  "  of  both  theories. 

Substantially  I  take  this  to  be  a  correct  statement  of 
the  case,  and  I  am  quite  prepared  to  stake  the  truth  of 
the  doctrines  in  question  upon  the  issue  thus  set  forth. 
But,  before  adverting  further  to  Mr.  Rickards's  objec 
tions,  it  will  be  desirable  first  to  understand  what  the 
doctrine  of  rent  is,  as  well  as  its  proper  limitations. 

The  object  of  a  theory  of  rent  is  to  explain  the  fact 
of  rent,  and  the  conditions  which  determine  its  rise  and 


THE   THEORY   OF  RENT.  ISO 

fall.  Iii  order,  therefore,  to  judge  of  the  theory,  we 
must  form  a  clear  and  definite  idea  of  the  fact  of  which 
it  is  designed  to  afford  the  explanation.  The  fact,  then, 
which  the  theory  of  rent  is  adduced  to  explain  is  the  ex 
istence  in  certain  branches  of  industry  of  a  permanent 
surplus  value  in  the  product,  beyond  wrhat  is  sufficient ', 
to  replace  the  capital  employed  in  production,  together  j 
with  the  usual  profits  which  happen  to  prevail  in  the  \ 
country.  Thus  a  farmer,  after  replacing  the  circulating- 
stock  employed  in  cultivating  his  farm  with  the  usual 
profits,  and  reserving,  besides,  interest  on  such  capital  as 
he  may  have  sunk  in  outlay  of  a  more  permanent  kind, 
finds  that  the  proceeds  of  his  industry  still  leave  him  an 
element  of  value.  This  element  of  value,  if  he  be  mere 
ly  the  occupier  of  his  farm,  goes  to  his  landlord;  or 
should  he  during  the  continuance  of  his  lease  be  able 
to  retain  a  portion  of  it,  he  will  at  all  events  on  its  ter 
mination  be  compelled  by  the  competition  of  other  farm 
ers  to  hand  it  over  to  his  landlord.  On  the  other  hand, 
if  the  farmer  be  himself  the  proprietor  of  the  land 
which  he  tills,  the  sum  in  question  will  of  course  accrue 
to  him  along  with  his  other  earnings.  In  the  same  way 
the  patentee  of  a  successful  invention,  on  selling  the 
produce  of  his  industry,  finds  himself  also  in  possession 
of  an  element  of  value  over  and  above  what  is  sufficient 
to  replace  the  cost  of  production,  together  with  the  or 
dinary  profits.  Now  it  is  this  surplus  value,  whether  de 
rived  from  agricultural  or  from  manufacturing  opera 
tions,  whether  retained  by  the  producer  or  handed  over 
to  the  owner. of  the  productive  instrument,  which,  consti 
tutes  "  rent "  in  the  economic  sense  of  that  word,  and  | 
the  existence  of  which  is  the  fact  to  be  accounted  for. 


190  -THE   THEORY  OF  RENT. 

You  will  observe,  I  say  "  in  tlie  economic  sense  of  the 
word,"  because  this  is  one  of  those  cases  in  which  the 
necessity  under  which  political  economists  are  placed  of 
using  popular  phraseology  in  scientific  discussions  has 
led  to  much  confusion  of  ideas  and  perplexity  of  reason 
ing.  The  term  "  rent "  is  in  popular  language  applied  to 
the  revenue  which  the  proprietor  of  any  article  derives 
from  its  hire.  Such  a  revenue,  however,  may  owe  its 
existence  to  different  causes.  The  rent,  e.  g.,  which  a 
landlord  receives  from  a  farmer  for  the  hire  of  his  land, 
is  derived  from  a  surplus  value  in  the  proceeds  of  the 
farmer's  industry  beyond  what  will  cover  the  expenses 
and  profits  of  his  farm.  On  the  other  hand,  the  build 
ing-rent  of  a  house  represents  no  surplus  value  of  this 
kind.  It  is  not  any  thing  in  addition  to  the  ordinary 
profit,  but  is  simply  the  ordinary  profit  or  interest  which 
the  builder  of  the  house  receives  on  the  capital  which 
he  has  sunk.1  There  may,  indeed,  be  fluctuations  in  the 

1  It  will  perhaps  occur  that  the  rent  of  land  may  equally  be  regarded  as 
the  interest  of  the  landlord's  capital  sunk  either  in  the  purchase  or  im 
provement  of  his  estate.  So  far  as  the  rent  paid  by  the  tenant  is  the  con 
sequence  of  improvements  made  in  the  land,  the  case  is  no  doubt  analo 
gous  to  that  of  building-rent,  and  the  payment  which  the  landlord  receives 
in  consideration  of  such  improvements  is  properly  regarded  as  the  returns 
on  the  capital  which  he  has  sunk.  .But  with  regard  to  the  remainder,  the 
same  explanation  is  not  available.  The  payment  of  this  by  the  tenant  is 
not  a  consequence  of  the  landlord's  purchase  of  the  land  (in  the  same  way 
as  the  increase  in  his  rent,  in  consideration  of  improvements,  is  a  conse 
quence  of  these  improvements)  :  on  the  contrary,  the  money  paid  for  the 
purchase  of  the  land  is  a  consequence  of  the  rent.  Farmers  do  not  pay 
rent  because  landlords  have  invested  money  in  the  purchase  of  their  es 
tates  ;  but  landlords  invest  money  in  this  way  because  farmers  are  willing 
to  pay  rent.  If  landlords  had  obtained  their  estates  for  nothing,  as  many 
have  so  obtained  them,  farmers  would  not  the  less  pay  rent ;  on  the  other 
hand,  if,  owing  to  any  cause,  corn  fell  permanently  in  value,  rents  would 
fall,  whatever  might  have  been  the  amount  of  the  purchase  money  given 
for  estates. 


THE   THEORY  OF  RENT.  191 

returns  upon  building  speculations,  as  upon  any  other 
speculations — the  speculators  receiving  sometimes  more, 
sometimes  less,  than  average  profits ;  but  there  is  in  this 
case  nothing  like  what  occurs  in  the  case  of  agricultural 
rent — a  permanent  surplus  beyond  what  is  sufficient  to 
indemnify  the  capitalist.  The  existence  of  this  surplus, 
then,  is  the  problem  which  the  theory  of  rent  has  to 
solve ;  and  the  question  is,  what  are  the  causes  to  which 
it  owes  its  existence,  and  what  are  the  laws  which  regu 
late  its  amount  ? 

Several  theories  have  at  different  times  been  advanced 
in  explanation  of  rent.  That  which  was  given  by  the 
French  economists,  and  which,  to  a  certain  extent,  was 
adopted  by  Adam  Smith,  traced  the  phenomenon  to  the 
superior  productiveness  of  agricultural  industry — to  the 
positive  fertility  of  the  soil.  Between  agricultural  in 
dustry  and  manufacturing,  commercial,  and  other  kinds, 
it  was  argued,  there  is  this  difference — that  in  the  for 
mer  alone  is  there  a  positive  addition  made  to  the  com 
modity  which  forms  the  subject-matter  of  the  industry. 
The  manufacturer  alters  and  adapts  his  material  to  some 
new  use.  The  merchant  transfers  the  article  of  his  trade 
from  the  scene  of  its  production  to  the  place  where  it 
may  be  required.  But  the  agriculturist  alone  employs 
the  matter  of  his  work  in  such  a  way  as  to  lead  to  a 
positive  increase  in  its  quantity.  Kature,  it  was  said,  co 
operates  here  with  human  effort,  and  there  consequent 
ly  arises  in  agriculture  a  produit  net,  or  "  rent,"  which 
has  no  place  in  other  fields  of  human  effort.  But,  pass 
ing  by  other  obvious  objections  to  this  theory,  it  suffices 
to  consider  that,  whatever  be  the  fertility  of  the  soil  and 
the  abundance  of  the  crop,  the  existence  of  a  surplus 


TIIE   THEORY  OF  RENT. 

value  iii  the  product  depends  not  on  these  circumstances 
alone,  but  also  upon  the  price  paid  for  the  commodity, 
in  order  to  see  that  it  fails  to  solve  the  problem  of  rent. 
It  offers  no  explanation  of  the  causes  which  regulate  the 
price  of  agricultural  produce.  It  gives  no  account  of 
the  fdct  that  this  price  remains  constantly  high  enough, 
not  only  to  replace  to  the  farmer  the  expenses  of  his 
outlay  with  the  usual  profits,  but  to  yield  a  revenue  be 
sides  to  the  owner  of  the  soil.1 

'  Adam  Smith's  contribution  to  the  doctrine  of  rent  as 
left  by  the  Physiocrats  consisted  in  the  statement  that 
the  demand  for  human  food  was  always,  and  the  de 
mand  for  other  kinds  of  agricultural  produce  was  gener 
ally,  so  great,  that  either  could  command  in  the  market 
a  price  which  wTas  more  than  sufficient  to  indemnify  the 
farmer,  and  that  the  surplus  value  naturally  went  to  the 
landlord.  This,  however,  still  left  the  problem  unsolved, 
and  moreover  implied  an  incorrect  view  of  the  laws  of 
value;  since, in  the  case  of  a  commodity  like  corn, which 
may  be  produced  in  any  quantity  required,  the  price  at 
which  it  sells  does  not,  except  during  short  intervals,  de 
pend  on. the  extent  of  the  demand  for  it,  but  on  the  cost 
of  its  production.  An  increase  in  the  demand  for  a  j 
manufactured  article,  e.g.,  generally  leads, as  soon  as  the  j 


1  M.  Courcelle  Seneuil  claims  that  the  true  theory  of  rent  was  perceived 
by  the  Physiocrats,  and  quotes  a  passage  from  Turgot's  work,  "Observa 
tions  sur  le  Me'moire  de  M.  de  St.  Peravy,"  which  shows  that  Turgot  rec 
ognized  the  fact  of  the  "  diminishing  productiveness  of  the  soil :"  but  there 
is  nothing  in  the  passage  to  show  in  what  way  this  fact  connects  itself 
with  the  phenomenon  of  rent.  I  can  not  hold,  therefore,  that  the  solution 
of  the  problem  of  rent  is  among  the  great  services  rendered  by  this  dis 
tinguished  philosopher  to  economic  science. — See  "  Traite'  d'Economie 
Politique,"  par  J.  G.  Courcelle  Seneuil,  tome  i.  pp.  179,  180. 


THE   THEORY   OF  REXT.  193 

J  supply  has  had  time  to  adjust  itself  to  the  change,  to  a 
/y  fall  in  the  price,  owing  to  the  circumstance  that  manu 
factured  articles  are  generally  produced  at  less  cost  when 
produced  on  a  large  scale.  The  demand  for  cotton  goods 
has  probably  been  decupled  in  the  course  of  the  last  half 
century,  but  this  has  simply  resulted  in  a  decupled  sup 
ply  produced  at  a  cheaper  cost  and  sold  at  a  proportion 
ately  lower  price.  How  does  it  happen,  then,  that  the  de 
mand  for  human  food  does  not  operate  in  the  same  way  ? 
If,  indeed,  food  were  a  strictly  monopolized  article,  if 
only  a  limited  quantity  of  it  could  be  produced,  we 
might  understand  how  an  increase  of  demand  for  it 
might  permanently  keep  up  its  price  above  the  cost  of 
its  production.  But  though  land  be  a  strictly  monopo 
lized  article  (at  least  in  old  countries),  food  is  not  so, 
since  the  quantity  of  food  which  may  be  raised  from  a 
limited  area  of  land,  though  not  infinite,  is  indefinite ; 
and  the  maximum  has  never  yet  been  reached,  or  nearly 
reached,  in  any  country,  and  probably  never  will.  The 
question,  therefore,  again  recurs — how  does  it  happen 
that  the  increased  demand  for  food  does  not  operate  in 
the  same  way  as  the  increased  demand  for  clothes  or 
shoes  or  hats,  or  other  manufactured  articles?  How 
does  it  happen  that  the  price  permanently  remains  at 
such  a  point  as  to  leave  a  permanent  surplus  value  over 
and  above  what  is  requisite  to  pay  cost  of  production 
with  the  usual  profit  ?  This  is  a  question  which  Adam 
Smith  failed  to  answer ;  and  he  consequently  failed  to 
solve  the  problem  of  rent. 

The  first  writer  who  gave  the  true  answer  to  this  ques 
tion  was,  I  believe  J)r.  Anderson,  in  a  work  published  in 
1777;  but  it  remained  for  llicardo  fully  to  perceive  the 

I 


THE   THEORY  OF  RENT. 

importance  of  the  principle  involved,  and  to  trace  its  in 
fluence  in  its  various  bearings  on  the  laws  of  the  produc 
tion  and  distribution  of  wealth. 

The  answer  to  the  question  is  as  follows : 
Agricultural  produce  is  raised  at  different  costs,  owing 
to  the  different  degrees  of  fertility  of  different  soils;  ow 
ing  also  to  this,  that,  even  of  that  corn  which  is  raised 
on  the  same  soil,  the  whole  is  not  raised  at  the  same  cost. 
!Now  in  order  that  that  portion  of  the  general  crop  of 
the  country  which  is  raised  at  greatest  expense  be  raised 
—that  is  to  say,  in  order  to  induce  the  cultivation  of  in 
ferior  lands,  and  the  forcing  of  superior  lands  up  to  such 
a  point  as  shall  secure  to  the  community  the  quantity 
of  food  required  for  its  consumption — the  price  of  agri 
cultural  produce  must  rise  at  least  sufficiently  high  to 
indemnify  with  the  usual  profits  the  farmer  for  this  — 
the  least  productive — portion  of  his  outlay.  If  the  price 
were  not  sufficient  for  this,  the  farmer  would  withdraw 
ihis  capital  from  the  production  of  that  portion  of  his 
crop  which  is  raised  at  greatest  expense,  and  would  in 
vest  it  in  some  other  business  in  which  he  had  a  fair 
prospect  of  average  profits.1  Xow  there  are  never  two 


1  It  will,  perhaps,  be  said  that  the  former  would  not  withdraw  his  capi 
tal  under  the  circumstances;  that,  being  liable  to  his  landlord  for  his  rent, 
he  will  get  the  most  he  can  out  of  his  land,  whatever  be  the  price  of  agri 
cultural  produce.  I  hold,  however,  that  a  capitalist  farmer  (and  it  is  only 
to  such  that  the  reasoning  applies)  would  certainly  do  nothing  of  the  kind. 
If  he  have  made  a  bad  bargain,  and  undertaken  to  pay  rent  for  land  of 
such  indifferent  quality  that  the  produce  at  the  current  prices  will  not  re 
place  his  capital  with  the  ordinary  profits,  it  will  be  much  better  for  him 
to  put  up,  once  for  all,  with  the  first  loss,  to  allow  his  land  to  lie  waste, 
and  to  turn  his  capital  into  some  employment  in  which  it  will  yield  him 
ordinary  profits,  than  to  continue  throwing  good  money  after  bad  by  farm 
ing  at  a  loss.  And  this  is  practically  what  every  farmer  does  whose  lease 


THE   THEORY  OF  RENT.  195 

prices  for  the  same  article  in  tlie  same  market.  It 
is  nothing  to  the  consumer  what  may  be  the  cost  at 
which  the  article  is  raised ;  lie  simply  looks  to  getting 
what  he  requires  as  cheaply  as  he  can.  If,  therefore, 
the  price  of  agricultural  produce  be  such  as  to  cover 
with  ordinary  profits  the  cost  of  that  portion  of  the  gen 
eral  crop  which  is  raised  at  greatest  expense  —  and  I 
have  shown  that  it  must  be  this  at  least — it  will  be  more 
than  sufficient  to  cover  with  ordinary  profits  the  cost  of 
that  portion  which  is  raised  at  less  expense.  There  will, 
therefore,  be  011  all  that  portion  a  surplus  value  over  and 
above  what  is  sufficient  to  replace  the  capital  of  the 
farmer  with  the  usual  profit;  and  this  surplus  value  is 
the  precise  phenomenon  of  rent  which  it  is  the  purpose 
of  the  theory  to  account  for. 

§  2.  Such,  briefly,  is  the  theory  of  rent  as  taught  by 
Ricardo.  When  you  have  thoroughly  mastered  this  prin 
ciple,  you  will  find  that  you  have  the  key  to  some  of  the 
most  important  problems  of  economic  science.  The  doc 
trine,  however,  is  one  which  is  peculiarly  liable  to  mis 
conception  ;  it  has  been  and,  I  regret  to  say,  is  still  the 
subject  of  much  controversy.  It  may  be  well,  therefore, 
to  state  in  somewhat  greater  detail  than  I  have  yet  done 
the  grounds  on  which  it  rests,  and  to  advert  to  some  of 
the  principal  consequences  which  flow  from  it. 

And,  in  the  first  place,  what  are  the  assumptions  on 


comprises  lands  too  poor  for  profitable  cultivation.  He  simply  does  not 
cultivate  such  land.  Instead  of  employing  his  surplus  capital  in  the  un 
profitable  cultivation  of  such  portions  of  his  farm,  he  allows  them  to  lie 
waste,  and  invests  his  spare  cash  in  trade,  in  railway  stock,  or  in  some 
other  enterprise  which  promises  average  profits. 


196  THE   THEORY  OF  RENT. 

which  the  theory  of  rent  is  founded  2  It  assumes,  first,  j  \ 
that  of  the  whole  agricultural  produce  of  the  country,  j 
those  portions  which  in  the  market  are  sold  at  the  same/ 
price  are  not  all  raised  at  the  same  cost ;  and,  secondly! 
that  the  price  at  which  the  whole  crop  sells  is  regulate!  / 
by  the  cost  of  producing  that  portion  of  it  which  is  prov 
dnced  at  greatest  expense.  If  these  two  points  be  grantl 
ed,the  existence  of  a  surplus  value,  or,  as  we  may  call  it^j 
"  economic  rent,"  is  a  logical  necessity  which  it  is  im-^ 
possible  to  evade ;  and  if  we  take  further  into  account 
the  motives  which  actuate  farmers  in  hiring  and  land 
lords  in  letting  their  land,  wTe  shall  see  that  it  is  equally 
a  logical  necessity  that,  under  the  action  of  competition, 
this  "  economic  rent "  should  pass"  to  the  proprietor  of 
the  coil.  The  least  consideration  will  make  this  evi 
dent.  If  corn  be  raised  at  different  costs,  and  if  the 
price  be  such  as  to  cover  with  ordinary  profits  the  cost 
of  the  most  costly  portion,  it  can  not  but  be  more  than 
sufficient  to  cover  with  ordinary  profits  the  cost  of  less 
costly  portions.  In  the  case,  therefore,  of  all  agricult 
ural  produce  raised  at  less  than  the  greatest  cost,  there 
must  arise  a  "  surplus  value."  And  it  is  equally  clear  / 
that  this  must  be  appropriated  by  the  landlord.  For,{  , 
though  farmers  who  had  leases  would  be  able  during 
the  currency  of  these  leases  to  retain  any  new  incre 
ments  of  "  economic  rent"  that  should  arise,  on  their  ex 
piration  they  would  stand  on  the  same  footing  as  the 
rest  of  their  class.  If,  under  these  circumstances,  they 
retained  the  "economic  rent,"  the  rate  of  profits  in  farm 
ing  would  be  largely  in  excess  of  the  rate  in  other  oc 
cupations.  Such  an  occurrence  could  not  fail  to  attract 
increased  capital  to  agriculture,  and  to  lead  to  a  competi- 


THE   THEORY  OF  RENT.  197 

tion  for  farms,  which  could  only  find  its  natural  termi 
nation  when  agricultural  and  other  profits  were  brought 

O  1  C5 

to  a  level — a  point  at  which  the  whole  "  economic  rent," 
or  surplus  value,  would  be  transferred  to  the  landlord. 

I  think,  therefore,  I  am  warranted  in  saying  that,  if 
the  two  assumptions  which  I  have  stated  be  granted,  the 
theory  of  rent  taught  by  Kicardo  follows  as  a  necessary 
consequence.  We  must,  therefore,  consider  what  are  the 
proofs  of  these  assumptions. 

First,  then,  I  say  that,  of  the  whole  agricultural  prod 
uce  of  the  country,  those  portions  which  sell  at  the 
same  price  are  not  all  raised  at  the  same  cost ;  that  is  to 
say,  that  a  given  barrel  of  wheat,  barley,  or  potatoes  of  a 
certain  quality  is  not  raised  at  the  same  cost  as  every 
other  barrel  of  wheat,  barley,  or  potatoes  of  the  same 
quality,  and  therefore  commanding  the  same  price.  And 
this  surely  is  a  proposition  that  scarcely  requires  serious 
proof.  To  deny  that  some  portions  of  the  general  crop 
of  the  country  are  raised  at  less  cost  than  others  is 
to  deny  that  some  soils  are  more  fertile  than  others,  is 
to  deny  that  the  county  of  Meath  is  more  fertile  than 
the  county  of  Galway — the  meaning  of  "more  fertile" 
being  that  a  given  amount  of  labor  and  capital  expend 
ed  thereon  produces  a  greater  result.  The  fact,  howev 
er,  if  seriously  questioned,  is,  like  all  the  axiomatic  truths 
of  Political  Economy,  susceptible  of  direct  proof.  The 
proper  ultimate  criterion  in  this  case  would  be  actual 
physical  experiment  on  the  soil.  Farmers  do,  in  fact, 
perform  the  experiment,  and  the  result  is  sufficiently 
evidenced  by  the  higher  rent  which  they  are  content  to 
pay  for  some  lands  than  for  others.1  I  think,  therefore, 

1  Vide  ante,  p.  ">1,  note. 


THE   THEORY  OF  RENT. 

we  are  warranted  in  assuming  as  an  incontrovertible 
fact  that  the  whole  agricultural  produce  of  the  country 
is,  taking  the  same  kinds  and  qualities,  not  raised  at  the 
same  cost.1 

But,  secondly,  the  price  at  which  the  whole  crop  sells 
is  determined  by  the  cost  of  producing  that  portion 
which  is  produced  at  greatest  cost.  It  is  not,  of  course, 
meant  by  this  that  the  market  price  of  corn  always  ac 
curately  corresponds  with  the  cost  of  this  portion.  As 
was  explained  on  a  former  occasion,2  when  it  is  said  that 
cost  regulates  price, what  is  meant  is  that  this  is  the  point 
which  the  price  constantly  tends  to  approach — the  cen 
tre  toward  which  it  constantly  gravitates.  This  being 
premised,  it  will  not  be  difficult  to  prove  that  the  price 
of  corn  is  determined  by  the  cost  of  producing  the  most 
costly  portion  of  the  general  crop.  It  is  clear  that  the 
price  must  at  least  be  sufficient  to  cover  this  cost  with 
the  ordinary  profit.  If  it  were  not,  there  would  be  no 
inducement  to  farmers  to  continue  the  production  of  this 
portion  :  a  farmer  will  not  continue  permanently  to  pro 
duce  corn  at  a  loss.  Before  he  invests  his  capital  in  his 

1  One  would  suppose  that  this  fact,  so  obvious  when  stated,  could  not 
long  have  escaped  the  attention  at  least  of  "practical  men."    Yet  it  was 
a  Committee  of  the  House  of  Commons,  who  piqued  themselves  on  their 
practical  knowledge,  that  reported  that  a  price  of  100s.  to  105s.  the  quar 
ter  for  wheat  was  necessary  to  enable  farmers  to  continue  the  cultivation 
of  their  land — less  than  this  not  being  a  "remunerative  price;"  as  if  the 
necessary  cost  of  raising  corn  were  some  fixed  quantity,  independent  of 
the  character  of  the  soil  on  which  it  is  raised,  or  of  the  point  to  which  cul 
tivation  may  be  forced  upon  it.     On  the  other  hand,  it  was  reserved  for  a 
"theorist  "  (Ricardo,  in  his  tract  on  "Protection  to  Agriculture")  to  dis 
cover  that  corn  may  be  grown  not  only  in  the  same  country  but  on  the 
same  soil  at  different  costs,  and  that,  therefore,  the  "  remunerative  price" 
will  vary  with  the  state  of  agriculture. 

2  Vide  ante,  p.  10(3. 


THE    THEORY   OF  RENT.  199 

business,  lie  will  consider  whether  he  lias  a  fair  prospect 
of  receiving  the  ordinary  returns  on  it ;  if  he  has  not,  he 
will  not  invest  it.  But  if  the  price  can  not  permanently 
be  less  than  is  sufficient  to  cover  with  ordinary  profits 
the  cost  of  this  portion,  it  is  equally  certain  it  can  not 
permanently  be  more  than  sufficient  to  do  this. 

This  will  appear  when  we  consider  the  following 
facts :  That  between  the  worst  and  the  best  lands  there 
are  soils  of  every  possible  degree  of  fertility :  some  on 
which  by  dint  of  high  culture  corn  might  be  raised,  but 
at  such  a  cost  that  it  would  not  replace  the  capital  ex 
pended  in  raising  it;  others  in  which,  though  the  re 
turns  might  replace  the  capital,  they  would  not  yield  a 
profit ;  others,  again,  in  which  the  returns  would  yield  a 
profit,  but  less  than  an  average  profit ;  and  others  still  in 
which  the  returns  will  just  replace  the  capital  expended 
with  average  profits,  and  no  more ;  and  when  we  consid 
er,  further,  that  no  soil  at  present  in  cultivation  yields  as 
much  corn  as  it  might  be  made  by  higher  cultivation  to 
yield  ;  that  in  forcing  the  soil  there  is  a  point  at  which 
the  returns  replace  with  ordinary  profits  the  capital  ex 
pended,  and  no  more,  and  beyond  which,  if  cultivation 
were  pushed,  though  it  would  lead  to  an  increase  of 
produce,  yet  this  increase  would  not  be  sufficient  to  re 
place  the  outlay  with  the  ordinary  profit :  in  a  word, 
that  there  is  a  point  up  to  which  it  is  profitable  to  culti 
vate,  and  beyond  which  it  is  not  profitable  to  cultivate 
—a  fact  from  which  it  results  that  even  on  the  most  fer 
tile  soil  the  cost  of  production  may  attain  any  height, 
however  great.  Kow  if  these  several  considerations  be 
borne  in  mind,  it  will  be  seen  that  the  price  of  corn  will 
not,  for  any  long  time,  remain  at  a  higher  rate  than  is 


200  THE    THEORY    OF  RENT. 

sufficient  to  cover  with  ordinary  profit  the  cost  of  that 
portion  of  the  general  crop  which  is  raised  at  greatest 
expense ;  for,  were  it  more  than  this,  the  extraordinary 
profit  would  at  once  stimulate  cultivation  ;  rich  lands 
would  be  farmed  more  highly,  and  lands  of  a  less  fertile 
quality  than  before  would  be  brought  under  tillage  ;  and 
the  process  would  continue  till  either  by  an  increased 
supply  the  price  was  brought  down  to  the  cost  of  pro 
duction,  or  through  the  increasing  expense  of  cultivation 
the  cost  of  production  rose  up  to  the  price.1  It  follows, 
therefore,  that  as  the  price  of  corn  can  not  remain  for 
any  length  of  time  at  a  lower  point  than  is  sufficient  to 
cover  the  cost  with  ordinary  profits  of  raising  the  most 
costly  portion,  so  neither  can  it  permanently  remain  at  a 
higher  point  than  is  sufficient  for  this  purpose.  The  ex 
tent  to  which  cultivation  shall  be  carried  in  bringing 
poor  soils  under  the  plow,  and  in  forcing  the  better 
qualities — what  Dr.  Chalmers  calls  "  the  extreme  mar 
gin  of  cultivation" — must  be  determined  by  the  wants 
of  society ;  but,  wherever  that  margin  may  be,  whatever 
in  the  actual  state  of  agriculture  may  be  the  cost  of 
raising  the  most  costly  portion  of  the  general  crop,  this 
will  be  the  regulator  of  price — the  point  which  it  will 
constantly  tend  to  approach. 

I  trust  I  have  now  established  to  your  satisfaction  the 
two  assumptions  on  which  rest  liicardo's  theory  of  rent. 
Let  rne  once  more  repeat  them  :  Of  the  total  quantity 
of  agricultural  produce  raised  in  a  country,  different 
portions,  quality  for  quality,  are  raised  at  different  costs 
of  production  ;  and,  secondly,  the  price  at  which  agricult- 


Yide  ante,  p.  100,  note. 


THE    THEORY   OF  RENT.  201 

ural  produce  sells  is  determined  by  the  cost  of  produc 
ing  that  portion  of  the  general  crop  which  is  raised  at 
greatest  expense.  From  these  two  assumptions,  or,  as  I 
may  now  call  them,  facts,  it  results,  as  I  have  already 
shown,  that  in  the  cultivation  of  agriculture  in  a  country 
like  England  a  u  surplus  value  "  arises  ;  while,  from  the 
principles  of  human  nature  brought  into  play  in  the 
traffic  for  farms, it  follows  that  this  "surplus  value"  must 
go  in  the  form  of  rent  to  the  proprietor  of  the  soil. 

§  3.  The  theory  of  rent  just  set  forth  explains  the  phe 
nomenon  of  rent  in  the  case  of  all  lands  on  which  agri 
cultural  produce  is  raised  at  less  than  the  greatest  cost 
at  which  it  can  be  profitably  produced  ;  and  this  de 
scription  applies  to  the  great  mass  of  agricultural  land 
in  a  country  like  England;  but  it  explains  it  in  this  case 
I  only.  It  has  accordingly  been  objected  to  the  theory, 
first,  that  it  fails  when  applied  to  new  colonies  in  which 
none  but  the  best  lands,  in  point  of  fertility  and  situation, 
are  under  cultivation  ;  where,  therefore,  since  all  the 
corn  is  raised  at  one  and  the  same  cost,  there  could,  ac 
cording  to  Ricardo's  theory,  be  no  surplus  value ;  and, 
secondly,  that  it  fails  to  account  for  the  payment  of  rent 
in  the  case  of  the  worst  lands  under  cultivation  in  every 
country,  on  which  the  whole  produce  is  raised  at  the 
maximum  of  cost,  as  well  as  in  the  case  of  those  lands 
which  are  too  poor  for  cultivation,  but  which  never 
theless  pay  rent. 

It  can  not  be  denied  that  the  facts  are  as  the  objection 
states  them  to  be ;  but,  if  you  have  fully  seized  what  I 
said  on  a  former  occasion  as  to  the  kind  of  proof  by 
which  economic  laws  are  established  or  refuted,  you  will 

12 


202  THE   THEORY   OF  RENT. 

understand  that  this  by  no  means  amounts  to  an  invali 
dation  of  the  theory.  That  theory,  as  I  have  shown  yon, 
rests  on  facts  quite  as  certain  as  those  which  are  urged 
against  it,  and  of  far  wider  reach  and  more  important 
bearing.  "What  the  objection  proves  is,  not  that  the  the 
ory  is  unfounded,  but  that,  over  and  above  the  phenom 
ena  which  it  accounts  for,  there  are  others,  not  perhaps 
properly  described  as  "  economic  rent,"  but  of  a  nature 
closely  allied  thereto,  for  which  it  does  not  account. 
It  is  a  case,  in  short,  and  at  the  utmost,  of  what  in  phys 
ical  science  is  called  "  a  residual  phenomenon,"  and  is 
to  be  treated  in  the  same  way — namely,  by  looking  out 
for  some  new  cause  or  principle  adequate  to  explain  the 
residual  fact.1 


1  On  the  recurrence  of  a  "residual  phenomenon"  in  physical  investiga 
tions  it  always  becomes  a  question  whether  the  theory,  which  leaves  the 
fact  unexplained,  is  to  he  retained,  accompanied  with  the  hypothesis  of 
some  concurrent  cause  undetected  to  Avhich  the  residual  phenomenon  may 
be  ascribed,  or  whether  the  theory  should  be  wholly  rejected.  But  in 
economic  reasoning  no  such  questions  can  arise.  The  grounds  of  the  dis 
tinction  have  been  pointed  out  in  the  third  lecture  ;  they  are  to  be  found 
in  the  different  character  of  the  proof  by  which  ultimate  principles  in  phys 
ical  and  economic  science  are  established.  The  proof  of  a  physical  theo 
ry  always,  in  the  last  resort,  comes  to  this,  that,  assuming  it  to  be  true,  it 
accounts  for  the  phenomena  ;  whence  it  follows  that  the  occurrence  of  a 
"residual  phenomenon"  in  physical  researches  necessarily  weakens  the 
proof  of  the  laws  which  fail  to  explain  it,  and,  if  such  exceptions  become 
numerous  and  important,  may  lead  to  the  entire  rejection  of  the  theory. 
On  the  other  hand,  it  is  always  regarded  as  the  strongest  confirmation  of 
the  truth  of  a  physical  doctrine,  when  it  is  found  to  explain  facts  which 
start  up  unexpectedly  in  the  course  of  inquiry.  (Vide  Appendix  C.)  But 
the  ultimate  principles  of  Political  Economy,  not  being  established  by  evi 
dence  of  this  circumstantial  kind,  but  by  direct  appeals  to  our  conscious 
ness  or  to  our  senses,  can  not  be  affected  by  any  phenomena  which  may 
present  themselves  in  the  course  of  our  subsequent  inquiries  (the  proof  of 
the  existence  of  such  phenomena  consisting  also  in  appeals  to  our  con 
sciousness  or  to  our  senses,  and  therefore  being  neither  more  nor  less  co 
gent  than  that  of  those  ultimate  principles)  ;  nor,  assuming  the  reasoning 


THE   THEORY  OF  RENT.  203 

Let  us  take,  c.  g.,  the  case  of  a  new  colony  for  every 
acre  of  land  in  which  government  exacts  a  rent  before 
it  permits  occupation.  Here  we  will  suppose  that  none 
but  the  best  lands  are  cultivated,  and  that  all  the  corn 
produced  in  the  colony  is  raised  at  the  same  cost.  Un 
der  these  circumstances  it  is  undeniable  that  rent,  or 
what  has  been  called  such,  has  been  frequently,  and  still 
is  in  many  cases,  paid.  It  is  certain,  however,  that  farm 
ers,  whether  in  a  new  colony  or  elsewhere,  will  not  en 
gage  in  the  production  of  corn  as  a  commercial  specula 
tion  if  they  have  not  a  reasonable  prospect  of  obtaining 
such  a  rate  of  return  on  their  investment  as  prevails  in 
the  place  where  they  reside.  If  an  emigrant  capitalist 
can  make  thirty  per  cent,  by  employing  men  at  gold  dig 
ging,  lie  will  not  be  content  with  twenty  per  cent,  on  grow 
ing  maize.  Consequently,  before  a  farmer  will  consent 
to  pay  the  rent  demanded  by  government  for  colonial 
land  the  price  of  corn  must  be  such  as  to  indemnify  him 
for  this  imposition.  Here,  then,  it  is  evident  that  the? 
excess  of  price  beyond  what  cost  of  production  requires 
—which  excess  of  price  goes  to  the  government  in  the 
form  of  rent — is  a  result  of  the  monopoly  of  the  land 
enjoyed  by  the  state. 

Again,  take  the  other  case  to  which  I  have  referred — 


process  to  be  correct,  can  the  theory  which  may  be  founded  on  them. 
We  have  here  no  alternative  but  to  assume  the  existence  of  a  disturbing 
cause.  In  the  case  before  us,  e.  g.,  under  whatever  circumstances  rent 
may  be  found  to  exist,  this  can  never  shake  our  faith  in  the  facts  that  the 
soil  of  the  country  is  not  all  equally  fertile,  and  that  the  productive  capac 
ity  of  the  best  soil  is  limited ;  nor  weaken  our  confidence  in  the  conclu 
sions  drawn  from  these  facts  that  agricultural  produce  is  raised  at  differ 
ent  costs,  and  that  in  the  play  of  human  interests  this  will  lead  to  the  pay 
ment  of  rent  to  the  proprietor  of  the  superior  natural  agent. 


2Q4  THE    THEORY    OF   RENT. 

the  case  of  rent  paid  for  the  worst  lands  under  cultiva 
tion  ;  or,  a  more  extreme  case  still,  the  case  of  rent  paid 
for  the  worst  lands  in  the  country,  too  poor  for  cultiva 
tion  of  any  kind.  "With  respect  to  the  former,  it  may 
perhaps  be  said  that  the  payment  of  rent  is  more  appar 
ent  than  real.  It  rarely  happens  that  the  lands  com 
prised  in  one  farm  under  one  holding  do  not  contain 
several  varieties  of  soil.  An  average  rent  is  struck  over 
the  whole,  and  the  bad  land  appears  to  pay  as  much  as 
the  good.  In  point  of  fact,  however,  it  is  the  extra  profit 
derived  from  the  better  qualities  of  land  that  makes  it 
worth  while  paying  rent  at  all.  The  payment  of  rent 
on  the  inferior  sorts  is  nominal  merely ;  so  that  we  are 
justified  in  saying  that  virtually  no  rent  is  paid  for 
such  lands. 

It  will  be  said,  however,  that  rent  of  some  kind  is  paid 
for  every  acre  of  land  in  Great  Britain,  however  barren 
and  worthless.  This  is  true  ;  but  where  this  is  so,  land 
is  not  taken  as  a  commercial  speculation.  The  rent 
which  may  be  obtained  for  land  too  poor  for  cultivation 
is  a  consequence  of  the  fact  that  land,  even  when  not 
available  as  an  instrument  for  the  production  of  wealth, 
is  still  an  object  of  desire  as  a  means  of  enjoyment,  and, 
being  also  limited  in  supply,  becomes  an  article  of  wealth. 
Mountains  in  Wicklow  and  in  the  Highlands  of  Scot 
land,  on  which  a  barrel  of  oats  could  with  difficulty  be 
raised,  will  nevertheless  let  at  a  good  round  rent  as  game- 
preserves  ;  and  even  where  there  is  not  vegetation 
enough  to  shelter  a  hare  or  a  grouse,  such  lands  are  yet 
not  to  be  had  for  nothing,  since,  at  the  least,  they  minis 
ter  to  the  pride  of  proprietorship.  In  this  case,  as  in 
that  of  the  unoccupied  lands  of  a  colony,  the  rent  which 


THE    THEORY   OF  RENT.  205 

the  owner  is  enabled  to  exact  is  simply  a  consequence  of 
the  monopoly  which  he  enjoys. 

I  have  mentioned  two  cases  of  rent  in  which  the  phe 
nomenon  is  not  explicable  on  the  theory  of  Ricardo.  I 
shall  now  mention  another — the  case  of  the  rent  paid  to 
the  patentee  of  an  invention  for  the  use  of  his  patented 
process,  where  this  process  has  superseded  all  others. 
Here  the  article  produced  is  all  produced  at  the  same 
cost ;  nevertheless  the  patentee  is  enabled  to  exact  a 
rent  for  the  hire  of  his  invention.  It  is  evident  that  the 
so-called  rent,  or  value  in  excess  of  cost  and  profit,  is  due 
in  this  case  to  the  same  cause  as  in  that  just  considered 
— namely,  monopoly.  There  is  indeed  this  limitation  on 
the  monopoly  of  a  patentee,  that  the  article  to  which  his 
patent  applies  may  still  be  produced  in  the  ordinary 
way;  but,  subject  to  this  limitation,  he  has  a  strict  mo 
nopoly  of  the  production  of  the  article.  He  will  conse 
quently  refuse  to  sell  it  except  at  such  a  price  as  shall 
leave  him,  not  only  ordinary  profit,  but  a  surplus  value 
besides  ;  or,  if  he  should  not  choose  to  engage  in  the  pro 
duction  himself,  he  will  not  permit  the  patented  process 
to  be  used  except  on  condition  that  the  person  using  it 
shall  pay  him  some  valuable  const-deration  for  its  use, 
leaving  it  to  the  producer  to  indemnify  himself  in  the 
price  of  the  article. 

It  thus  appears  that,  besides  the  causes  of  rent  em 
braced  in  the  theory  of  Ricardo,  there  is  another — name 
ly,  monopoly — from  which  also  the  phenomenon  may  take 
;its  rise.  When  any  of  the  agents  or  instruments  indis 
pensable  to  the  production  of  an  article  is  monopolized, 
the  pei-son  in  possession  of  the  monopoly  may  refuse  to 
allow  the  article  to  be  produced, except  on  his  own  terms; 


THE   THEORY  OF  RENT. 

consequently,  under  such  circumstances  the  article,  what 
ever  it  may  be,  will  not  be  produced  unless  the  price  of 
it  be  sufficient  to  enable  the  producer  to  comply  with 
these  terms,  besides  getting  the  ordinary  remuneration 
for  himself. 

§  4.  Perhaps  it  will  here  occur  to  some  of  my  readers 
that  the  introduction  of  two  distinct  principles  into  the 
theory  of  rent  involves  an  unnecessary  complication ; 
and  that — land  being  a  monopolized  article — the  simple 
condition  of  monopoly  in  connection  with  the  play  of 
supply  and  demand  would  suffice  to  account  for  the 
phenomenon  in  all  cases  whatever.  A  little  reflection, 
however,  will  show  that  such  a  generalization  is  not  ad 
missible.  Agricultural  rent,  as  it  actually  exists,  is  not 
a  consequence  of  the  monopoly  of  the  soil,  but  of  its  di 
minishing  productiveness.  If  it  were  not  for  this  latter 
condition,  though  rent  might  exist,  it  would,  both  as  re 
gards  its  amount  and  the  laws  of  its  rise  and  fall,  be 
governed  by  principles  wholly  different  from  those  which 
determine  the  actual  phenomenon  in  its  more  familiar 
form.  Further,  it  is  a  mistake  to  suppose  that,  in  order 
to  the  existence  of  "  economic  rent,"  land  should  belong 
to  one  class  of  persons,  and  be  cultivated  by  another,  or 
even  that  it  should  be  a  marketable  commodity.  So 
long  as  land  is  not  uniform  in  quality,  and  so  long  as 
its  productiveness  diminishes  when  its  capacity  of  yield 
ing  produce  has  been  forced  beyond  a  certain  point,  so 
long  agricultural  products  will  be  raised  at  different 
costs,  and  so  long  there  will  arise  that  surplus  value  in 
such  products,  over  and  above  the  average  returns  ob 
tainable  in  other  branches  of  industry,  which,  as  I  have 


THE   THEORY  OF  RENT.  207 

shown,  is  the  essence  of  "  economic  rent."  For  the  ex 
istence  of  rent,  therefore,  monopoly  and  the  play  of  sup 
ply  and  demand  are  not  necessary ;  nor  do  they  suffice 
to  account  for  the  phenomenon  in  the  form  in  which  we 
most  commonly  find  it. 

As  the  causes  determining  rent  in  the  ordinary  case  of 
agricultural  rent  are  different  from  those  which  deter 
mine  it  in  the  special  cases  to  which  I  have  called  atten 
tion,  so  also  are  the  consequences  in  the  distribution  of 
wealth  different  in  the  two  cases.  In  the  ordinary  case 
of  agricultural  rent,  the  relation  of  rent  to  price  is  not 
that  of  cause  to  effect,  but  of  effect  to  cause  ;  rent,  that 
is  to  say,  is  the  consequence,  not  the  cause  of  the  high 
price  of  agricultural  products.  If,  e.  g.,  the  property  of 
landlords  were  confiscated,  the  price  of  corn  would  not 
be  affected,  since  the  price  must  still  be  sufficient  to  cover 
the  expense  of  producing  the  portion  of  the  general 
crop  which  is  raised  at  greatest  cost,  and,  as  I  have  al 
ready  shown,  it  is  not  more  than  sufficient  to  do  this 
at  present.  The  effect  of  such  a  measure  would  not 
be  to  abolish  "economic  rent,"  but  simply  to  transfer 
this  element  of  value  from  the  owners  to  the  cultivators 
of  land. 

On  the  other  hand,  in  the  special  cases  of  rent  refer 
red  to — in  the  case,  e.  g.,  of  the  unoccupied  lands  of  a 
colony,  rent  is  not  the  effect,  but  the  cause  of  price. 
In  Great  Britain  the  price  of  corn  rises  because  the 
government  demands  a  rent.  In  the  ordinary  case, 
the  landlord  demands  a  rent  because  the  price  of  corn 
is  high.  If  in  the  former  case  the  government  were 
to  abandon  its  exactions,  the  price  of  corn  would  fall 
proportionally ;  in  the  latter,  the  high  price,  not  being 


20S  THE   THEORY   OF  RENT. 

due  to  the  exactions  of  the  landlord,  would  not  be 
affected  by  their  abandonment. 

The  same  is  true  of  all  cases  of  rent,  where  rent  is  the 
consequence  of  monopoly,  e.  g.,  in  the  case  of  a  patentee. 
The  value  of  an  article  produced  by  a  patented  process 
is  sufficient  to  afford  a  rent  to  the  patentee  after  cover 
ing  the  expenses  and  profits  of  the  producer.  But  abol 
ish  the  monopoly  of  the  patentee,  and  the  competition 
of  producers  would  at  once  bring  down  the  price  by  the 
amount  of  the  rent;  in  other  words,  the  surplus  value 
would  disappear ;  and  this  is,  in  fact,  what  always  hap 
pens  on  the  expiration  of  the  term  of  a  patent. 

But  again,  rent,  according  as  it  results  from  the  prin 
ciples  noticed  by  Ricardo,  or  from  monopoly,  is  govern 
ed  by  different  laws.  "With  regard  to  the  former  phe 
nomenon — what  I  may  describe  as  "  Ricardian"  or  "eco 
nomic  rent" — we  can  now  have  no  difficulty  in  stating 
the  conditions  which  determine  its  amount.  As  we  have 
seen,  it  consists  in  the  surplus  value  appertaining  to  agri 
cultural  produce  over  and  above  what  suffices  to  indem 
nify  the  farmer  for  his  outlay  on  the  terms  of  remuner 
ation  current  in  the  country.  This  surplus  value  mani 
festly  depends  on  two  conditions:  on  the  one  hand  on 
the  price  of  agricultural  produce,  on  the  other  on  the 
quantity  of  such  produce  obtainable  from  a  given  area 
of  land.  We  may,  therefore,  formulate  the  law  of  agri 
cultural  rent  as  follows :  The  price  of  agricultural  prod 
uce  being  given,  agricultural  rent — that  is  to  say,  the 
"economic  rent"  accruing  from  agricultural  land — will 
vary  directly  with  the  productiveness  of  agricultural  in 
dustry —  this  productiveness  being  the  function  of  two 
variables,  viz.,  the  natural  fertility  of  the  soil  and  the 


THE   THEORY  OF  RENT.  209 

skill  with  which  labor  is  applied  to  it ;  or,  the  produc 
tiveness  of  agricultural  industry  being  given,  rent  will 
vary  directly  with  the  price  of  produce. 

On  the  other  hand,  rent,  where  it  is  a  consequence  of 
monopoly,  depends  simply  on  the  demand  for  and  supply 
of  the  article,  ^f  he  amount  of  rent  which  the  English 
government  may  exact  for  unoccupied  lands  in  Australia 
is  controlled  by  nothing  but  its  own  will  on  the  one  hand, 
and  on  the  other  the  strength  of  the  desire  and  the  abil 
ity  to  purchase  on  the  part  of  the  colonists.  In  Great 
Britain  consumers  would  be  able  and  willing  to  pay 
ten  times  or  twenty  times  the  present  price  for  bread 
rather  than  do  without  it ;  and  landlords,  we  may  vent 
ure  to  assume,  would  have  little  scruple  about  exact 
ing  higher  rents,  had  they  the  power  to  do  so ;  but 
just  as  the  competition  of  farmers  operates  to  enable 
landlords-  to  appropriate  that  portion  of  the  returns  of 
land  which  is  in  excess  of  ordinary  profit,  so,  on  the 
other  hand,  the  competition  of  landlords  among  them 
selves  renders  the  exaction  of  more  than  this  impracti 
cable.  That  landlords  should  be  able  to  keep  up  the 
price  of  corn  by  holding  out  for  higher  rents  would  re 
quire  a  combination  of  the  whole  body,  which,  without 
a  law  to  enforce  it,  it  would  be  impossible  to  carry  into 
effect.  But  what  landlords,  from  their  number  and  ri 
valry,  are  unable  to  do,  government,  wielding  the  con 
centrated  power  of  the  community,  has  no  difficulty  in 
doing.  If,  e.  g.,  government  chose  to  exclude  foreign 
corn  from  a  new  colony,  it  might,  by  demanding  a  high 
er  rent,  force  up  the  price  of  corn  to  any  point  short  of 
the  extreme  limit  which  consumers  were  able  and  will 
ing  to  pay.  Rent,  therefore,  is  in  such  case  governed 


210  THE   THEORY  OF  REXT. 

not  by  the  necessary  cost  or  costs  of  producing  corn,  but 
simply  by  the  need  and  ability  to' purchase  of  the  con 
sumer  011  the  one  hand,  and  by  the  disposition  of  the 
owner  of  the  natural  agent  on  the  other — or,  according 
to  the  usual  phraseology,  by  demand  and  supply. 

We  have  arrived,  therefore,  at  the  following  conclu 
sions  :  Agricultural  rent,  to  which  alone  the  theory  pro 
pounded  by  Kicardo  is  applicable,  differs  from  the  other 
cases  to  which  I  have  adverted— first,  with  reference  to 
its  cause:  the  cause  of  agricultural  rent  being  the  differ 
ent  costs  at  which  agricultural  produce  is  raised,  while 
the  other  cases  of  rent  are  due  to  the  principle  of  mo 
nopoly  ;  secondly,  it  differs  in  the  consequences  to  which 
it  leads :  agricultural  rent  having  no  effect  upon  price, 
while  the  rent  that  results  from  monopoly  leads  to  a 
rise  of  price  in  proportion  to  the  rent;  and,  thirdly,  it 
differs  in  the  laws  by  which  it  is  governed:  the  rent 
which  results  from  monopoly  being  governed,  like  other 
cases  of  monopoly,  solely  by  the  principles  of  demand 
and  supply,  while  the  rise  and  fall  of  agricultural  rent 
depend  on  the  relation  between  the  productiveness  of  ag 
ricultural  industry  and  the  price  of  agricultural  produce. 
It  is  most  important  to  observe  the  distinction  between 
these  two  phenomena  of  rent,  to  the  confusion  between 
which  the  objections  which  have  been  advanced  by  va 
rious  writers  against  the  theory  of  Kicardo  owe  what 
ever  plausibility  they  possess.  So  important  indeed  is 
the  distinction'  that,  were  we  framing  a  new  nomenclat 
ure  of  Political  Economy,  I  should  prefer  confining  the 
term  rent  to  the  case  of  agricultural  rent,  as  contemplat 
ed  by  Ricardo,  considering  those  other  cases  of  rent 
are  the  consequences  of  monopoly  as  coming 


THE   THEORY  OF  RENT.  211 

under  the  head  of  taxes  on  commodities,  to  which  they 
are  strictly  analogous.  In  a  certain  sense,  the  sovereign 
authority  of  the  state  may  be  said  to  have  a  monopoly 
of  every  article  of  production,  inasmuch  as  it  may  refuse 
to  permit  its  production  except  upon  such  conditions  as 
in  its  sovereign  pleasure  it  chooses  to  enact.  The  British 
government,  e.  (/.,  imposes  a  tax  upon  malt,  and  refuses  to 
allow  malt  to  be  made  except  on  condition  that  for  every 
bushel  of  barley  malted  a  certain  sum  be  paid  into  the  ex 
chequer.  The  consequence  is  that  the  price  of  malt  rises 
to  such  a  point  as  is  sufficient  not  only  to  cover  the  ex 
penses  and  profits  of  production,  but  to  leave  over  and 
above  a  surplus  value  which  goes  to  the  government  as 
the  malt-tax.  If  government  were  to  raise  the  tax  high 
er,  the  price  would  rise  higher ;  if  it  were  to  abolish  the 
tax,  the  price  would  fall  proportionally.  It  is  evident 
this  is  in  all  respects  analogous  to  the  case  of  a  rent  on 
the  unoccupied  lands  of  Australia,  and  is  attended  with 
consequences  of  precisely  the  same  kind.  The  revenue 
derived  from  this  source,  therefore,  would  be  more  prop 
erly  considered  as  a  tax  on  raw  produce  than  as  rent. 
In  the  same  way,  the  rent  derived  from  a  patented  proc 
ess  has  all  the  attributes  of  a  tax.  It  springs  from  the 
monopoly  of  the  patentee ;  it  is  regulated  by  his  discre 
tion  ;  and  it  constitutes  an  addition  to  the  natural  price 
of  the  article.  The  word  "  tax,"  however,  is  generally 
confined  to  the  exactions  of  the  state ;  and  the  laxity 
with  which  the  term  "  rent"  is  applied  to  every  form  of 
revenue  derived  from  articles  let  to  hire  is  probably  too 
inveterate  to  be  corrected.  It  is  all  the  more  important, 
therefore,  that  the  distinction  in  facts  should  be  careful 
ly  noted. 


212  THE   THEORY   OF  RENT. 

§  5.  In  the  opening  of  the  present  observations  I  call 
ed  attention  to  the  ground  of  objection  taken  by  Mr. 
Rickards  to  the  doctrines  which  I  have  been  examining 
in  this  and  the  last  lecture,  viz.,  that  they  "  both  rest 
upon  the  same  assumption — that  of  diminishing  produc 
tiveness  of  the  land  as  compared  with  the  undiminished 
power  of  human  fecundity."  My  object  in  recurring 
to  this  question  now  is  not  to  offer  any  further  arguments 
in  support  of  a  position  which  I  conceive  has  been  al 
ready  sufficiently  established,  but  to  avail  myself  of  the 
reasoning  of  Mr.  Rickards  in  illustration  of  what  it  has 
been  the  object  of  these  lectures  to  prove — viz.,  the  influ 
ence  which  mistaken  views  of  the  character  and  method 
of  economic  science  have  exercised  in  producing  those 
discrepancies  of  opinion  in  relation  to  fundamental  doc 
trines  to  which  I  adverted  in  the  outset. 

Mr.  Rickards  denies  that  "  the  diminishing  productive 
ness  of  agricultural  industry"  is  a  fundamental  econom 
ic  law ;  and  having  quoted  Mr.  Mill's  statement  of  the 
law,  with  his  explanation  that  it  is  constantly  neutralized 
in  a  greater  or  less  degree  by  "  an  antagonizing  princi 
ple  "  designated  by  Mr.  Mill  "  the  progress  of  civiliza 
tion,"  proceeds  to  remark  :l 

"  With  regard  to  the  alleged  laic  of  production,  herald 
ed  forth  by  this  author  as  '  the  most  important  proposition 
in  Political  Economy,'  I  confess  myself  unable  to  under 
stand  on  what  foundation  it  is  supposed  to  rest.  A  law 
of  the  social  system,  if  I  rightly  understand  the  expression, 
can  only  be  deduced  from  ascertained  facts ;  it  is  a  rule 
founded  on  a  plurality  of  instances  to  the  same  effect. 
We  are  entitled,  therefore,  to  ask,  When  and  where  lias 

1  "Population  and  Capital,"  pp.  13.",  130,  137. 


THE    THEORY    OF  REXT.  213 

such  a  law  been  found  in  operation  ?  What  period  or 
what  country  can  be  referred  to  in  which  the  rule  has  been 
or  is  now  in  force  ?  Certainly  it  does  not  hold  good  in 
England — a  country  where,  undoubtedly,  though  there  is 
still  great  room  for  improvement,  'men  have  applied 
themselves  to  cultivation  with  some  energy,  and  have 
brought  to  it  some  tolerable  tools;'  a  country,  too,  in 
which  the  peculiar  density  of  its  population  operates  con 
stantly  to  bring  fresh  soils  into  cultivation.  But  in  En 
gland  it  seems  to  be  admitted,  or,  at  all  events,  it  can  be 
abundantly  proved,  that  if  we  take  any  two  periods  suffi 
ciently  distant  to  aiford  a  fair  test,  whether  50  or  100  or 
500  years,  the  productiveness  of  the  land  relatively  to  the 
labor  employed  upon  it  has  progressively  become  greater 
and  greater.  .  .  .  But  the  manner  in  which  Mr.  Mill  ac 
counts  for  the  admitted  aberrations  from  his  supposed  law 
of  production  presents  to  my  mind  still  greater  difficulties. 
The  law,  according  to  him,  is  counteracted  or  suspended 
by  an  agency  which  is  *  in  habitual  antagonism '  to  it ; 
and  this  agency  is,  in  brief  phrase, 'the  progress  of  civili 
zation.'  Are,  then,  the  only  exemplifications  of  this  'law' 
to  be  found  in  countries  in  which  civilization  is  not  ad 
vancing  ?  Is  the  law  one  which  never  co-exists  with  a 
state  of  social  progress?  But,  surely,  it  is  such  a  state  as 
this  that  all  our  reasonings,  as  political  economists,  presup 
pose  ;  this  is  '  the  natural  course  of  things,'  as  Mr.  Sen 
ior  justly  says, 'for  it  is  the  course  for  which  nature  has 
fitted  us.'  Suppose  civilization  not  advancing,  and  all 
those  phenomena  of  the  social  system  which  economists 
have  studied  and  described  become  reversed — population 
falls  off",  combination  of  labor  gives  place  to  isolation,  ma 
chinery  to  manual  toil,  communications  are  cut  off,  ex 
change  is  impeded,  and  labor  of  every  kind,  not  only  agri 
cultural  but  manufacturing  also,  becomes  less  and  less  pro 
ductive.  This  is,  no  doubt,  true  ;  but  this  can  hardly  be 
what  Mr.  Mill  means  by  'the  most  important  proposition 
in  Political  Economy,'  for  it  is  one  which  operates  only  in 
an  abnormal  state  of  human  affairs,  and  gives  place  to  a 


214:  THE   THEORY  OF  RENT. 

converse  rule  whenever  the  manifest  design  of  Providence 
and  destiny  of  our  species  are  fulfilled — that  is,  by  the  prog 
ress  of  civilization.  It  is  that  progress  which,  by  its  man 
ifold  effects  arid  influences,  direct  and  indirect,  as  set  forth 
by  Mr.  Mill  himself,  tends  to  confer,  as  wealth  and  num 
bers  multiply,  an  increasing  productiveness  both  on  the 
soil  and  on  every  other  field  of  human  industry.  This  is, 
indeed,  a  '  law '  which,  so  far  as  experience  hitherto  in 
forms  us,  has  never  failed  to  operate,  and  of  which  we 
may,  therefore,  reasonably  infer  that  its  beneficient  opera 
tion  is  still  likely  to  continue." 

Mr.  Rickards's  conception  of  "  an  economic  law  "  is, 
as  appears  from  this  passage,  something  essentially  dif 
ferent  from  that  of  Mr.  Mill,  and,  as  might  be  expected, 
the  views  of  these  economists  as  to  the  kind  of  evidence 
applicable  to  the  proof  of  such  a  law  are  equally  at  va 
riance. 

An  "  economic  law,"  according  to  Mr.  Mill's  view, 
represents  the  influence  which  a  particular  cause  (in 
the  present  instance,  the  physical  character  of  the  soil) 
exerts  on  some  of  the  phenomena  of  wealth  ;  and,  agree 
ably  with  this  view,  his  method  of  establishing  the  law 
consists  in  a  reference  to  facts  which  prove  the  phys 
ical  character  in  question,  and  then  in  reasoning  on  the 
premises  thus  obtained.  According  to  Mr.  Eickards,  on 
the  other  hand,  an  "  economic  law  "  is  not  an  assertion 
respecting  the  influence  of  any  one  cause,  or  even  the 
combined  influence  of  any  number  of  known  and  def 
inite  causes,  but  a  statement  of  the  order  in  which 
events  have  actually  taken  place  —  these  events  being 
the  result  of  a  vast  variety  of  causes,  more  or  less  or 
not  at  all  knowrn  ;  and  this  being  his  conception  of  an 
economic  law,  he  naturally  has  recourse  to  history  or 


THE   THEORY  OF  RENT.  215 

statistical  tables  in  order  to  establish  it.  The  one  is  a 
statement  respecting  a  tendency  now  existing,  the  ulti 
mate  proof  of  which  is  to  be  sought  in  the  character 
of  man  or  in  physical  nature  :  the  other  is  a  statement 
respecting  an  historical  fact,  and,  as  such,  must  of  course 
ultimately  rest  upon  documentary  evidence.  In  what 
ever  sense,  therefore,  each  may  be  determined,  it  is 
plain  that  neither  can  be  taken  in  refutation  of  the 
other,  since  it  merely  amounts  to  the  assertion  of  a 
wholly  different  proposition.  In  deciding,  therefore, 
between  Mr.  Eickards  and  Mr.  Mill,  we  have  to  con 
sider,  not  which  proposition  is  true,  for  there  is  nothing 
incompatible  in  the  two  doctrines,  but  which,  regard 
being  had  to  the  ends  of  Political  Economy  —  the  ex 
planation  of  the  phenomena  of  wealth — is  to  the  pur 
pose. 

Now  touching  that  "law,"  "which,  so  far  as  expe 
rience  hitherto  informs  us,  has  never  failed  to  operate  " 
(so  says  Mr.  Eickards) — "  the  progress  of  civilization  " 
— it  is  obvious  that,  as  I  observed  wThen  replying  to  the 
same  argument  on  a  former  occasion,1  such  a  state 
ment  affords  no  explanation  of  any  phenomenon  con 
nected  writh  the  production  and  distribution  of  wealth, 
but  is  itself  the  expression  of  a  complex  and  difficult 
phenomenon  which  it  is  the  business  of  the  political 
economist  to  explain.  To  bring  forward  this  as  a  final 
result  in  economic  speculation — to  deprecate  all  anal 
ysis  of  the  causes  on  which  the  so-called  "  law  "  depends 
(and  this  is  what  Mr.  Eickards's  argument  would  re 
quire) — is  simply  to  abandon  all  pretensions  to  solving 

1  See  ante,  p.  ISO. 


THE   THEORY    OF  RENT. 

the  problems  of  wealth  —  is  to  give  up  at  once  the 
cause  of  Political  Economy  as  a  branch  of  scientific 
research. 

On  the  other  hand,  the  influence  of  the  physical  qual 
ities  of  the  soil,  as  expressed  by  the  law  of  its  diminish 
ing  productiveness  in  Mr.  Mill's  sense,  is  a  principle 
most  important  with  reference  to  the  objects  of  Polit 
ical  Economy,  and  quite  essential  in  enabling  us  to  un 
derstand  the  actual  phenomena  presented  by  agricult 
ural  industry — a  principle  which,  taken  in  conjunction 
with  the  various  agencies  included  under  the  expres 
sion  '-progress  of  civilization,"  explains,  among  other 
things,  that  general  tendency  to  a  fall  of  proiits  and 
rise  of  rent,  which,  though  frequently  and  sometimes 
for  long  periods  interrupted,  is  nevertheless  one  of  the 
most  striking  circumstances  connected  with  the  mate 
rial  interests  of  advancing  communities.  It  is  to  be 
observed  that  there  is  nothing  in  what  I  have  quoted 
from  Mr.  Eickards,  nor,  I  may  add,  in  any  part  of  his 
work,  which  can  properly  be  said  to  impugn  the  cor 
rectness  of  this  explanation.  -In  terms,  indeed,  he  de 
nies  some  of  the  propositions  on  which  it  is  founded, 
but  in  terms  only ;  when  we  come  to  examine  his  mean 
ing,  we  find  that  it  has  reference  to  a  wholly  distinct 
question.  His  remarks,  so  far  as  they  are  pertinent, 
consist  in  an  attempt  to  ridicule  the  idea  of  any  expla 
nation. 

"Mr.  Mill's  law,"  he  says,  "has  not  yet  come  into 
operation."1  And  why?  Because,  forsooth,  it  has 
been  counteracted  by  a  law  of  an  opposite  tendency. 

1  Page  HI. 


THE    THEORY   OF  RE  XT.  217 

"  It  has  been  postponed  (to  say  the  least)  by  the  habit 
ual  antagonism  of  various  causes."  I  am  most  anx 
ious  not  to  misrepresent  Mr.  Rickards,  but  it  appears 
to  me  that  the  only  possible  inference  to  be  drawn 
from  this  language  is  that  he  refuses  to  admit  the  ex 
istence  of  a  law  or  tendency  unless  the  operation  of 
this  law  be  perfectly  free  from  all  obstructing  or  coun 
teracting  influences ;  in  short,  that  he  regards  the  mut 
ual  counteraction  of  opposing  forces  as  an  amusing  but 
unsubstantial  fiction  of  philosophers. 

It  is  scarcely  necessary  to  say  that  such  views  go  di 
rectly  to  impugn  the  whole  received  system  of  induc 
tive  philosophy.  If,  for  example,  such  objections  are 
to  be  listened  to,  how  is  the  first  law  of  motion  to  be 
established  ?  The  objector  might  say,  "  When  and 
where  has  such  a  law  been  found  in  operation  ?  cer 
tainly  it  does  not  hold  good  in  England."  So  far  from 
its  being  true  that  a  projectile  once  set  in  motion  will 
proceed  forever  in  the  same  direction  with  unimpaired 
velocity,  we  know  that  the  best  minie  rifle  will  not  send 
a  ball  more  than  a  couple  of  miles,  and  that  it  is  almost 
immediately  bent  out  of  its  direct  course  into  one 
nearly  resembling  a  parabola.  "  Does  the  law  of  mo 
tion  only  operate  in  an  abnormal  state  of  human  af 
fairs?"  If  the  physical  philosopher  were  to  explain 
that  the  natural  tendency  of  the  law  was  "habitually 
counteracted  "  by  the  antagonizing  force  of  gravity,  he 
would  be  met  by  the  retort  that  this  mode  of  account 
ing  for  "  the  admitted  aberrations  from  the  supposed 
law  presented  to  the  mind  still  greater  difficulties." 
The  law  of  motion,  according  to  the  physical  philos 
opher,  "  is  counteracted  or  suspended  by  an  agency 

K 


218  THE   THEORY  OF  RENT. 

which  is  in  habitual  antagonism,  and  this  agency  is,  in 
brief  phrase,"  the  law  of  gravitation.  "  Are  then  the 
only  exemplifications  of  this  law  to  be  found  in  coun 
tries  in  which  "  the  law  of  gravitation  does  not  exist  ? 

It  is,  I  say,  scarcely  necessary  to  insist  that  such  a 
line  of  reasoning  is  wholly  inconsistent  with  the  re 
ceived  logic  of  the  inductive  sciences ;  and,  if  admit 
ted,  the  structure  must  fall.  The  diagonal  of  a  paral 
lelogram  must  no  longer  stand  for  the  resultant  of  the 
forces  represented  by  the  sides.  The  facts  of  the  as 
cent  of  a  balloon  through  the  air,  of  the  rise  of  the 
mercury  in  the  Torricellian  tube,  must  be  considered 
as  a  "  refutation  "  of  the  law  of  gravity ;  the  gyrations 
of  a  boomerang  as  a  disproof  of  the  first  law  of  mo 
tion.  The  neutral  salt,  just  because  it  is  neutral,  no 
longer  contains  the  acid.  Friction  has  no  existence 
and  no  effect,  because  it  does  not  bring  the  vehicle  to 
a  stop.  The  advance  of  a  ship  against  wind  and  tide 
is  a  proof  that  there  is  no  wind  or  tide.  The  progress 
of  the  world  in  civilization  is  a  proof  that  there  are  no 
passions  in  human  nature,  and  no  laws  in  the  physical 
world  which  tend  to  impede  it.  In  short,  the  notion  of 
"habitual  antagonisms"  is  to  be  at  once  exploded. 
The  attempt  to  resolve  complex  uniformities  into  sim 
ple  principles  —  in  Baconian  language,  "  the  interpre 
tation  of  nature"— is  to  be  abandoned,  and  we  are 
henceforward  to  content  ourselves  with  the  rough  sta 
tistical  results. 

According  to  the  views  here  indicated  of  the  char 
acter  and  method  of  the  science,  Political  Economy 
is  plainly  identical  with  the  statistics  of  wealth  and 
population,  and  this  is  a  view  of  Political  Economy 


THE   THEORY   OF  RE  XT.  219 

which  is  probably  widely  entertained,  and,  for  aught 
I  know,  may  include  some  Professors  among  its  sup 
porters.  If  this  view,  however,  is  to  be  accepted,  the 
pretensions  of  the  study,  as  a  means  of  analyzing  and 
explaining  the  causes  and  laws  of  which  the  facts  pre 
sented  by  statistical  records  are  but  the  result,  must  bo 
given  up.  We  may  indeed  give  to  the  empirical  gen 
eralizations  which  are  to  be  found  at  the  bottom  of  our 
statistical  tables,  and  which  are  "  founded  on  a  plu 
rality  of  instances  to  the  same  effect,"  the  sounding- 
title  of  "  laws  of  our  social  system ;"  but  if  such  em 
pirical  generalizations  are  to  be  regarded  as  ultimate 
facts,  if  every  attempt  at  further  analysis  is  to  be  met 
by  ridicule  of  the  idea  of  causes  being  in  "  habitual  an 
tagonism,-'  and  by  simple  re-assertion  of  the  complex 
phenomenon  to  be  explained,  then,  however  we  may 
persist  in  retaining  the  forms  and  phrases  of  science, 
the  scientific  character  of  the  study  is  gone ;  and  Po 
litical  Economy  has  no  longer  any  claim  to  be  admit 
ted  among  those  departments  of  knowledge  of  which'': 
the  business  is  not  only  to  observe,  but  to  interpret : 
nature. 

It  appears  to  me,  however,  that  there  is  nothing  in  the 
phenomena  of  wealth  which  takes  them  out  of  the  cate 
gory  of  facts  in  explanation  of  which  the  method  of 
analysis  and  deductive  reasoning  may  be  applied.  I 
have  endeavored  to  show  that  while  on  the  one  hand  we 
labor  under  much  disadvantage,  as  compared  with  those 
who  investigate  physical  phenomena,  in  being  precluded 
from  experiment,  and  in  having  to  deal  with  facts  of  an 
extremely  complex  and  fluctuating  character;  on  the 
other  hand  we  possess  peculiar  advantages  in  deriving 


220  TUE   THEORY  OF  RENT. 

:our  premises  either  directly  from  our  consciousness,  or 
from  physical  facts  easily  ascertainable,  instead  of  be- 
\  ing  obliged  to  elicit  them  by  long  and  intricate  courses 
of  inductive  reasoning.  It  has  been  by  following  the 
method  indicated  in  this  view  of  the  problems  of  wealth 
that  such  truths  as  Political  Economy  has  yet  brought 
to  light  have  been  established;  and  by  steadily  prosecut 
ing  our  inquiries  in  the  same  direction  by  the  same 
road,  I,  for  one,  feel  confident  that  most  of  the  difficul 
ties  which  now  beset  economic  questions  may  be  over 
come,  and  that  still  more  important  truths  may  be  dis 
covered.1 


1  I  may,  perhaps,  be  permitted  to  refer  to  my  Essay,  "Political  Economy 
and  Land" — in  the  volume  "Essays  in  Political  Economy, Theoretical 
and  Applied" — for  a  discussion  of  some  aspects  of  the  problem  of  rent  not 
treated  in  the  foregoing  lecture,  and  in  particular  for  an  examination  of  the 
effects  of  different  social  conditions  in  causing  a  divergence  of  the  actual 
rent  paid  by  cultivators  from  the  "economic  rent"  as  defined  by  the  the 
ory  of  Ilicardo. 


APPENDICES. 


APPENDICES. 


APPENDIX  A. 

IF,  not  confining  myself  to  economists  of  established  position 
and  reputation,  I  were  to  include  every  writer  on  economic  ques 
tions,  there  is  not  a  single  doctrine  within  the  range  of  the  science 
that  could  be  said  to  be  undisputed.  A  late  writer  (1857),  e.g., 
Mr.  Macleod,  in  a  work  entitled  "  The  Theory  and  Practice  of 
Banking,"  proposes  to  make  a  complete  tabula  rasa  of  Political 
Economy  (which  he  considers  as  "  almost  a  branch  of  mechan 
ics  ;" — "  all  sciences,"  he  tells  us,  being  "  questions  of  force  and 
motion  "),  and  to  reconstruct  it,  taking  as  its  basis  certain  notions 
of  credit  and  capital,  which  he  claims  to  be  the  first  to  have 
evolved,  and  his  title  to  the  discovery  of  which  will  probably  pass 
unchallenged.  This  writer  thus  delivers  himself:  "We  do  not 
hesitate  to  say  that  there  is  not  a  single  writer  on  Political  Econ 
omy  who  has  given  a  correct  account  of  them  [the  laws  of  wealth] ; 
and  more  especially  what  has  been  written  lately  is  the  result  of 
the  most  extraordinary  misconception  of  the  nature  of  the  thing, 
the  most  profound  ignorance  of  the  details  of  business  clothed 
in  language  so  palpably  self-contradictory  and  inaccurate  as  to 
excite  nothing  but  surprise"  (vol.  ii.,  Introduction,  p.  Iviii.).  .  .  . 

"  THE  TIME  HAS  COME  WHEN  ALL  POLITICAL  ECONOMY  MUST  BE  RE 
WRITTEN.  Every  error  in  thought  and  language,  which  confused 
and  retarded  all  the  other  inductive  sciences,  now  deforms  and  ob 
scures  monetary  science.  There  is  hardly  an  expression  in  com 
mon  use  among  writers  on  the  subject  which  is  not  totally  erro 
neous"  (p.  Ixxx.). 

The  weapons  by  which  Mr.  Macleod  proposes  to  demolish  the 
present  edifice  of  the  science  would  seem  to  be  vituperative  epi 
thets.  Here  are  a  few  examples  of  his  method.  Ricardo's  theory 


224: 


APPENDIX  A. 


of  rent  he  brands  as  a  "  prodigious  delusion."  Mr.  Mill's  nomen 
clature  implies  "  the  most  ludicrous  misconception,"  etc.  Of  the 
doctrine  that  cost  of  production  regulates  value,  he  says  that  "  no 
more  stupendous  philosophical  blunder  ever  infected  the  princi 
ples  of  any  science."  In  the  next  sentence  it  is  called  a  "  tremen 
dous  fallacy,"  and  further  on  a  "  pestilent  heresy."  Mr.  Tooke's 
distinction  between  currency  and  capital  exhibits  "  a  profound 
misconception  of  the  -whole  nature  of  monetary  science — "  .  .  . 
"  one  of  the  most  profound  delusions  that  ever  existed."  A  pas 
sage  quoted  from  Colonel  Torrens  is  "  nothing  but  a  series  of  blun 
ders  and  absurdities;"  his  statements  are  "simply  ridiculous;" 
while  in  another  place  he  confounds  together  in  one  sweeping 
category  "  Mr.  Ricardo,  Mr.  McCulloch,  Mr.  John  S.  Mill,  Mr.  Sam 
uel  Jones  Loyd,  Colonel  Torrens,  Mr.  Norman,  Sir  Eobert  Peel,  and 
Sir  Archibald  Alison,"  as  the  propounders  of  every  species  of  log 
ical  fallacy. 

The  cause  of  the  failure  of  Political  Economy  hitherto,  Mr.  Mac- 
leod  tells  us,  is  "  that  no  writer  who  has  yet  handled  it  possessed 
the  indispensable  qualifications  for  success."  These  qualifications 
the  writer  then  not  obscurely  hints  have  been  incarnated  for  the 
first  time  in  the  person  of  the  author  of"  The  Theory  and  Practice 
of  Banking."  Among  the  requisites  for  success,  one  wrould  imag 
ine  a  competency  to  write  the  English  language,  and  a  capacity 
to  understand  the  views  of  previous  writers  before  denouncing 
them,  wrould  be  included.  How  far  these  are  included  among 
Mr.  Macleod's  qualifications  the  reader  may  judge  from  the  fol 
lowing  examples. 

First,  to  take  a  specimen  of  this  author's  defining  power.  "  Cap 
ital,"  he  tells  us,  "is  the  circulating  power  of  commodities"  (vol. 
ii.,  Introduction,  p.  xlvii.).  When  Mr.  Macleod  tells  us  elsewhere 
that  "the  object  and  function  of  capital  is  to  circulate  commodi 
ties,"  he  uses  language  which,  however  objectionable  and  repug 
nant  alike  to  scientific  requirement  and  to  popular  usage,  has  at 
least  the  merit  of  being  intelligible.  Again,  when  he  says  that 
"  capital  and  credit  constitute  the  circulating  medium,"  though 
the  expression  implies  a  fundamental  misconception  of  the  nature 
of  the  agencies  in  question,  we  may  yet  guess  at  what  he  means. 
But  when  he  says  that  "  capital  is  the  circulating  power  of  com- 


APPENDIX  A.  225 

modities,"  if  be  does  not  mean  to  attribute  to  commodities  a  fac 
ulty  of  locomotion,  he  uses  language  which  is  capable  of  convey 
ing  no  idea  whatever ;  yet  this,  he  tells  us,  is  "  the  original  primary 
and  genuine  sense  of  capital"  as  distinguished  from  "the  second 
ary  or  metaphorical  sense."  Let  us  suppose  that  Mr.  Macleod 
meant  by  the  expression,  "circulating  power  of  commodities," 
what  assuredly  the  language  does  not  convey,  viz.,  the  power 
which  circulates  commodities,  even  this  will  not  help  him.  From 
his  remarks  elsewhere  it  is  plain  that  he  meant  to  designate  money 
and  credit.  Now  money  and  credit  are  not  the  power  which  cir 
culates  commodities,  any  more  than  air  is  the  power  which  trans 
mits  sounds,  or  language  the  power  which  communicates  ideas. 
The  power  which  performs  all  these  things  is  the  human  will ; 
money  and  credit  in  the  one  case,  air  and  language  in  the  other, 
being  the  media  or  instruments  by  which  the  several  ends  are  ac 
complished.  But,  without  entering  into  the  metaphysical  ques 
tion,  let  us  ask  what  would  be  thought  of  a  writer  who  should 
describe  air  as  "  the  transmitting  power  of  sounds,"  or  language 
as  "  the  communicating  power  of  ideas  ?" 

Take  another  example  of  Mr.  Macleod's  scientific  precision.  He 
thus  lays  down  the  criterion  of  a  true  principle,  "Every  true  for 
mula,  oi'  general  rule,  must  ~bear  on  the  face  of  it  all  the  elements  which 
influence  its  action"  (p.  Ixv.),  i.  e.,  which  influence  the  action  of  the 
formula  I  One  may  guess  at  the  idea  which  Mr.  Macleod  intends 
to  express ;  but  the  words  as  they  stand  are  destitute  of  meaning. 
Take  another  case.  In  p.  Ixi.,  etc.,  Mr.  Macleod  objects  to  the 
law  of  "  cost  of  production  regulating  value,"  because  it  is  inap 
plicable  to  "  all  cases  where  the  same  cost  of  production  produces 
articles  of  different  qualities."  "Will  Mr.  Macleod  inform  us  how 
"  cost  of  production  "  can  "  produce  articles  ?"  In  another  pas 
sage  he  writes  thus, "  Alone  of  all  the  political  sciences,  its  phe 
nomena  [i.  e.,  the  phenomena  of  monetary  science]  may  be  express 
ed  with  the  unerring  certainty  of  the  other  laws  of  nature  "  (p. 
xxxv.).  If  I  may  venture  to  conjecture  the  meaning  of  this  re 
markable  passage  (which  has  a  curiously  Hibernian  ring  about  it), 
possibly  what  Mr.  Macleod  meant  to  say  was  that  the  phenomena 
of  monetary  science  may  be  expressed  with  the  same  unerring 
certainty  as  the  phenomena  of  the  other  inductive  sciences — a 

K  2 


APPENDIX  A. 

thought,  one  would  imagine,  which  might  be  conveyed  without 
severely  taxing  the  resources  of  the  English  tongue. 

These  are  a  few  specimens,  and  by  no  means  unfavorable  ones, 
of  Mr.  Macleod's  ordinary  scientific  style ; 1  they  are  taken,  it  will 
be  observed,  from  that  portion  of  his  work  in  which  accuracy  of 
expression  would  be  found,  if  it  were  to  be  found  at  all — namely, 
from  his  definitions  and  statements  of  general  principles. 

I  have  called  attention  to  them,  not  only  because  of  the  impor 
tance  of  accuracy  of  thought  and  language  in  economic  discussion, 
but  because  this  writer,  not  content  with  pronouncing  a  general 
and  sweeping  condemnation  on  all  preceding  writers  on  Political 
Economy,  has  singled  out  for  special  denunciation  their  defects 
in  regard  to  precision  of  language,  a  quality  on  which  it  is  evi 
dent  he  peculiarly  values  himself.  Thus  his  anger  passes  all 
bounds  against  Mr.  Mill,  because  that  author  states  at  the  open 
ing  of  his  treatise  that  it  is  no  part  of  his  design  "  to  aim  at 
metaphysical  nicety  of  definition,  when  the  ideas  suggested  by  a 

1  As  a  specimen  of  his  style  when  he  is  less  restrained  by  scientific  con 
siderations,  take  the  following :  "  Some  Political  Economists  pretend  that 
the  rules  of  the  science  are  not  applicable  to  extreme  cases.  An  extreme 
ly  convenient  cover  for  ignorance,  truly !  Such  arguments  only  prove 
the  incapacity  of  those  who  use  them.  If  an  architect  had  miscalculated 
the  strength  of  the  materials  of  his  columns,  and  his  building  came  tum 
bling  down,  and  he  were  to  run  about,  crying  out,  'It  is  an  extreme 
case;  the  laws  of  mechanics  do  not  apply  to  it!'  the  world  would  set 
him  down  as  a  fool.  If  an  engineer,  whose  boiler  was  to  burst  from  bad 
workmanship,  were  to  say  that  it  was  an  extreme  case,  and  that  the  laws 
of  heat  did  not  apply  to  it,  he  would  be  set  down  as  a  fool.  In  both  these 
cases  people  would  say  that  the  architect  and  the  engineer  did  not  pay 
sufficient  attention  to  the  laws  of  nature.  They  would  not  say  that  the 
laws  of  nature  paled  before  the  incompetence  of  man.  Those  Political 
Economists  who  say  that  the  laws  of  their  science  are  not  applicable  to 
extreme  cases  are  just  like  such  an  architect  or  such  an  engineer.  Such 
a  doctrine  is  the  mere  cloak  of  their  own  incompetence  and  ignorance. 
A  false  theory  may  account  well  enough  for  a  particular  case,  like  an  en 
gine  may  be  at  rest  whose  piston  is  crooked,  whose  wheels  and  cranks 
are  all  out  of  order.  But  the  test  of  a  well-finished  engine  is  to  work 
smoothly;  it  must  be  set  in  motion  to  test  it  properly.  Just  so  with  a 
theory;  it  must  be  worked — it  must  be  set  in  motion.  If  it  be  true, 
like  a  well-fitting  engine,  it  will  work  smoothly,  it  will  explain  all  phe 
nomena  in  the  science ;  if  it  be  not  true,  like  a  badly  fitting  engine  it  will 
crack,  split,  break  in  all  directions. 

"Mr.  Macaulay  has  used  a  similar  line  of  argument  with  great  skill 
and  effect,"  etc. 


APPENDIX  A.  227 

term  are  already  as  determinate  as  practical  purposes  require." 
For  this  Mr.  Mill  is  charged  with  deliberately  adopting  "  all  the 
loose  phraseology  of  the  public  " — with  seeking  to  "  found  a  sys 
tem  on  the  loose  babble  of  common  talk."  After  the  few  samples 
given  above,  probably  most  readers  will  prefer  the  laxity  of  Mr. 
Mill  to  the  rigid  accuracy  of  Mr.  Macleod.  Mallem,  mehercule,  er- 
rare  cum  Platone. 

But  a  word  with  regard  to  Mr.  Macleod's  capacity  of  under 
standing  the  authors  whose  writings  he  treats  so  contemptuously. 
A  large  portion  of  the  introduction  to  his  second  volume  is  de 
voted  to  an  attempt  to  controvert  the  received  doctrine,  which  at 
tributes  to  "  cost  of  production  "  a  governing  influence  on  the  val 
ue  of  certain  classes  of  commodities.  "  Political  Economy,"  he 
says,  "  can  never  advance  a  step  until  this  arch-heresy  be  utterly 
rooted  out."  Well,  what  is  his  contradiction  of  the  "  arch-here 
sy  ?"  Here  it  is,  given  in  capitals :  "  VALUE  DOES  NOT  SPRING  FROM 

THE  LABOR  OF  THE  PRODUCER,  BUT  -FROM  THE  DESIRE  OF  THE  CON 
SUMER.  To  allege,  that  value  springs  from  the  labor  of  the  pro 
ducer  is  exactly  an  analogous  error  in  Political  Economy  to  the 
doctrine  of  the  fixity  of  the  earth  in  Astronomy"  (p.  Ixiv.). 

Granting  that  the  analogy  is  perfect  (though,  for  one,  I  am  un 
able  to  perceive  it),  will  Mr.  Macleod  inform  us  who  has  said  that 
"  value  springs  from  the  labor  of  the  producer  ?"  His  so-called 
"  refutation  "  was  more  particularly  addressed  to  the  views  of  Mr. 
Ricardo  and  Mr.  Mill.  In  the  second  paragraph  of  Mr.  Ricardo's 
great  work,  he  writes  as  follows :  "  Utility,  then,  is  not  the  measure 
of  exchangeable  value,  although  it  is  essential  to  it.  If  a  commod 
ity  were  in  no  way  useful — in  other  words,  if  it  could  in  no  way 
contribute  to  our  gratification — it  would  be  destitute  of  exchange 
able  value,  however  scarce  it  might  be,  or  whatever  quantity  of  la 
bor  might  ~be  necessary  to  procure  it."  The  first  sentence  in  Mr.  Mill's 
chapter  "  On  Demand  and  Supply  in  their  Relation  to  Value"  is  as 
follows :  "  That  a  thing  may  have  any  value  in  exchange,  two  con 
ditions  are  necessary.  It  must  ~be  of  some  use — that  is,  it  must  con 
duce  to  some  purpose,  satisfy  some  desire.  But,  secondly,  the  thing 
must  not  only  have  some  utility,  there  must  also  be  some  difficulty 
in  its  attainment." 

Mr.  Macleod's  refutation  of  the  doctrine  that  "  cost  of  production 


228  APPENDIX  A. 

regulates  value  "  is,  therefore,  simply  a  refutation  of  his  own  ex 
travagant  misconception  of  it.  If  any  further  evidence  be  neces 
sary  to  show  this,  take  the  following  passage,  in  which  an  objec 
tion  is  taken  to  the  ordinary  limitation  which  is  given  to  this 
doctrine — "  because  for  it  to  indicate  price  correctly,  even  in  that 
one  instance,  it  requires  this  essential  qualification,  that  the  supply 
should  be  unlimited  "  (p.  Ixi.).  Now  if  the  supply  were  "  unlimit 
ed,"  the  article  could  have  no  exchange  value  whatever.  What 
the  authors  who  have  maintained  this  doctrine  have  stated,  and 
what  possibly  Mr.  Macleod  intended  to  say,  was  that  the  articles, 
of  which  the  value  is  regulated  by  cost  of  production,  are  only 
those  which  may  be  freely  produced  in  any  quantity  required ; 
but  Mr.  Macleod  can  see  no  distinction  between  this  and  an  "  un 
limited  supply." 

When  a  writer  thus  shows  an  entire  inability  to  comprehend 
the  meaning  of  authors  of  such  remarkable  perspicuity  and  power 
of  expression  as  Mr.  Ricardo  and  Mr.  Mill  (for  I  will  not  suppose 
that  he  intentionally  misrepresents  them),  his  competency  for  the 
task  he  has  undertaken  of  reconstructing  the  science  of  Political 
Economy,  may  be  imagined.  It  is,  of  course,  unnecessary  to  no 
tice  his  "  arguments  "  in  refutation  of  the  doctrine  in  question. 
It  will  be  time  enough  to  do  so  when  he  shows  that  he  under 
stands  the  principle  he  assails. 


APPENDIX  B. 

THE  limits  of  economic  investigation  contended  for  in  the  text, 
though,  as  has  been  seen,  not  in  keeping  with  the  theories  of  some 
distinguished  economists,  have,  in  the  actual  development  of  the 
science,  been  all  but  universally  observed.  As  a  rule,  every  econ 
omist,  so  soon  as  an  economic  fact  has  been  traced  to  a  mental 
principle,  considers  the  question  solved,  so  far  as  the  science  of 
wealth  is  concerned ;  just  as  he  considers  it  equally  solved  when 
he  has  traced  such  a  fact  to  a  physical  principle.  Though  Adam 
Smith  has  not  formally  discussed  the  question,  his  view  may  be 
inferred  from  the  following  passage  :  "  The  division  of  labor  from 
which  so  many  advantages  are  derived  is  not  originally  the  ef 
fect  of  any  human  wisdom  which  foresees  and  intends  that  gener 
al  opulence  to  which  it  gives  occasion.  It  is  the  necessary  though 
very  slow  and  gradual  consequence  of  a  certain  propensity  in  hu 
man  nature  which  has  in  view  no  such  extensive  utility— the  pro 
pensity  to  truck,  barter,  and  exchange  one  thing  for  another. 
Whether  this  propensity  be  one  of  those  original  principles  in 
human  nature,  of  which  no  further  account  can  be  given,  or 
whether,  as  seems  more  probable,  it  be  the  necessary  consequence 
of  the  faculties  of  reason  and  speech,  it  belongs  not  to  the  present 
sutyect  to  inquire"  ("Wealth  of  Nations,"  book  i.  chap.  ii.).  In 
other  words,  he  distinctly  declines  to  "explain  the  laws  of  mind" 
under  which  division  of  labor  takes  place ;  regarding  them  as 
facts  not  to  be  explained,  but  to  be  taken  notice  of  and  reasoned 
upon,  in  precisely  the  same  way  as  in  a  subsequent  chapter  he  no 
tices  the  physical  qualities  of  the  precious  metals — their  portabil 
ity,  durability,  divisibility,  etc. — as  physical  facts  to  be  taken  ac 
count  of,  in  order  to  understand  the  general  adoption  of  them 
for  the  purposes  of  money.  He  no  more  attempts  to  explain  the 
mental  principles  which  lead  to  division  of  labor  than  he  at- 


930  APPENDIX  B. 

tempts  to  explain  the  physical  principles  which  render  the  pre 
cious  metals  suitable  as  a  medium  of  exchange.  In  both  cases, 
in  the  language  of  Mr.  Senior,  "  he  is  satisfied  with  stating  their 
existence." 

The  only  writer,  so  far  as  I  know,  who  has,  in  practice,  tran 
scended  the  limits  indicated  and  observed  by  Adam  Smith,  is 
Mr.  Jennings  in  his  "  Natural  Elements  of  Political  Economy." 
Not  content  with  assuming  mental  principles  as  premises  to  be 
reasoned  upon,  in  the  same  way  as  physical  principles  are  as 
sumed  and  reasoned  upon,  Mr.  Jennings  regards  the  explanation 
of  the  laws  of  mind  as  coming  properly  within  the  province  of 
the  political  economist ;  and,  agreeably  with  this  view,  his  book 
is  devoted  to  an  analysis  of  the  principles  of  human  nature,  psy 
chological  and  physiological,  which  are  brought  into  action  in 
the  pursuit  of  wealth.  Thus,  having  resolved  the  operations  of 
industry  into  certain  movements  of  muscles  and  nerve-fibre,  he 
proceeds  "  to  inquire  w:hat  is  the  modus  operandi  of  the  mental 
influence  which  actuates  these  organic  instruments ;"  and  this 
modus  operandi  having  been  analyzed,  and  the  mental  elements 
of  the  process  ascertained,  he  makes  these  the  basis  of  the  divi 
sion  of  industrial  actions.  These  he  divides  as  follows,  viz. :  first 
ly,  those  which  are  "  marked  simply  by  the  law  of  former  co-exist 
ence  " — of  which  he  gives  the  examples  of  "  digging,  threshing, 
rowing,  sawing,"  etc. ;  secondly,  those  which  are  "  marked  by 
the  application  of  judgment  to  the  merely  memorial  trains  of 
thought,"  e.  g.,  those  of  "  superintendents,  inspectors,"  etc. ;  third 
ly,  those  which  are  "  marked  by  the  application  of  the  law  of  re 
semblance  to  those  processes  of  thought,"  e.  g.,  those  of  "painters 
and  sculptors ;"  and,  fourthly,  those  which  are  "  marked  by  the 
further  application  of  judgment  to  resemblance,"  e.  g.,  those  of 
"judges,  legislators,"  etc.  (pp.  115  to  117). 

Hitherto  the  nomenclature  of  Political  Economy  has  been 
framed  with  reference  to  the  phenomena  of  wealth,  or  the  mode 
of  its  production  and  distribution.  Mr.  Jennings,  taking  a  differ 
ent  view  of  the  nature  of  economic  science,  defines  and  classifies 
on  wholly  different  principles.  Thus,  "  consumption  "  he  defines 
as  "  that  class  of  human  actions  in  which  the  instrumentality  of 
the  afferent  trunks  of  nerve-fibre  is  predominant."  The  sensa- 


APPEXDIX  B.  231 

tions  which  attend  upon  consumption,  again,  he  divides  "  into 
two  classes,  according  as  they  are  conveyed  by  the  nerves  of  com 
mon  sensation,  or  by  the  nerves  of  special  sensation."  In  the  for 
mer  class  are  comprised  "  sensations  of  resistance,"  of  "  tempera 
ture,"  ..."  sensations  consequent  on  the  gratification  of  appetite," 
etc.  In  the  latter,  viz.,  those  conveyed  by  nerves  of  special  sen 
sation,  are  included  the  charms  of  "  color,  of  "  form,"  and  of 
"  sound ;" .  .  .  "  the  luscious  taste  which  the  palate  derives  from 
elaborate  substances,  in  which  sapid  properties  are  joined  with 
congenial  odors,  and  diffused  through  substances  agreeable  to  the 
touch." 

If  Political  Economy  is  to  be  treated  in  this  way,  it  is  evident 
it  will  soon  become  a  wholly  different  study  from  that  which  the 
world  has  hitherto  known  it.  It  is  undoubtedly  true,  as  Mr. 
Jennings  remarks  in  his  preface,  that  the  subject-matter  of  Polit 
ical  Economy  represents  the  complex  result  of  mechanical,  chem 
ical,  physiological,  and  biological  laws,  together  with  the  laws  of 
mental  and  political  philosophy ;  but  I  can  not  think  that  it  fol 
lows  from  this  that  "  each  of  the  more  complex  of  these  subjects, 
being  governed  by  all  the  laws  which  govern  every  subject  of  in 
ferior  complexity,  in  addition  to  its  own  peculiar  laws,  ought  not 
to  be  examined  until  the  difficulties  which  surround  each  of 
these  less  complex  subjects  have  been  surmounted  progressively 
and  seriatim."  Were  this  rule  rigorously  enforced,  and  were  no 
one  to  be  allowed  to  matriculate  as  a  political  economist  till  he 
had  mastered  all  the  less  complex  sciences,  including  mechanics, 
.'astronomy,  chemistry,  magnetism,  electricity,  general  physics,  phys 
iology,  biology,  together  with  mental  and  political  philosophy, 
the  practice  would  certainly  be  attended  with  the  advantage  of 
effecting  a  very  extensive  reduction  in  the  economic  ranks ;  if, 
indeed,  with  the  exception  of  Mr.  Jennings  himself,  any  should 
be  found  capable  of  passing  the  terrible  ordeal.  But  I  confess 
that  I  am  quite  unable  to  see  the  necessity  of  making  such  im 
possible  demands  upon  the  human  intellect.  Surely,  to  recur  to 
the  example  taken  from  Adam  Smith,  it  is  possible  to  perceive 
that  division  of  labor  and  exchange  facilitate  the  production  of 
wealth,  without  deciding  whether  the  disposition  which  leads  to 
this  course  of  conduct  be  an  original  or  derived  faculty ;  or  to 


APPENDIX  B. 

understand  the  advantages  which  the  precious  metals  offer  as  a 
measure  of  value  and  medium  of  exchange,  though  we  may  be 
wholly  ignorant  whether  they  are  simple  or  complex  substances, 
or  appear  at  the  positive  or  negative  pole  of  the  battery.  Or,  to 
take  an  example  from  Mr.  Jennings's  book,  I  confess  I  arn  quite 
unable  to  see  what  new  light  is  thrown  upon  the  causes  which 
determine  the  laborer's  condition,  by  his  telling  us  that  during 
"  production  the  instrumentality  of  the  efferent  trunks  of  nerve- 
fibre  is  predominant,"  wThile  during  "  consumption  "  it  is  "  the 
afferent  trunks  of  nerve-fibre  which  prevail."  So  long  as  the  re 
sult  is  the  same,  so  long  as  human  beings  possess  the  same  ener 
gies,  require  the  same  subsistence,  and  are  influenced  by  the  same 
motives,  the  economic  laws  of  wages  will  be  the  same,  though 
they  had  neither  "afferent"  nor  "efferent"  trunks  of  nerve-fibre 
in  their  bodies.  Even  were  the  encyclopedic  knowledge  de 
manded  by  Mr.  Jennings  easily  attainable,  it  appears  to  me  that 
nothing  but  confusion  and  error  could  arise  from  extending  eco 
nomic  inquiry  beyond  the  limits  which  have  hitherto  been  ob 
served.  Take,  e.  g.,  the  division  of  industrial  operations  which  I 
have  quoted  above  from  Mr.  Jennings,  founded  upon  his  analysis 
of  the  mental  principles  engaged — what  is  the  economic  value  of 
this  classification  ?  What  light  does  it  throw  on  the  phenomena 
and  lawrs  of  wealth  ?  Mr.  Jennings  places  in  the  same  class  of 
"  industrial  operators"  judges  and  legislators,  because  the  actions 
in  which  they  engage  are  "marked  by  the  application  of  judg 
ment  and  resemblance  to  the  merely  memorial  trains  of  thought ;" 
but,  economically  considered,  if  it  be  desirable  to  class  them  at 
all,  judges  are  far  more  widely  separated  from  legislators  than 
from  "  superintendents,"  or  from  "  diggers,  threshers,  rowers,  or 
sawyers,"  who  are  placed^in  distinct  classes  ;  judges  being  highly 
paid  officers,  while  legislators  (at  least  in  Great  Britain),  instead 
of  being  paid,  are  obliged  to  pay  handsomely  to  be  allowed  to 
exercise  their  functions.  If  a  judge  be  paid  more  highly  than  a 
digger,  it  is  not  because  the  exercise  of  the  functions  of  the  latter 
involve  only  "  memorial  trains  of  thought,"  while  the  exercise  of 
those  of  the  former  involve  besides  the  faculties  of  judgment  and 
of  perceiving  analogies — this,  economically  considered,  being  an 
accident ;  but  because  the  persons  who  are  qualified  to  perform 


APPENDIX  B.  233 

the  functions  of  a  judge  are  much  fewer  than  those  who  are 
qualified  to  dig  ;  and  the  reason  the  former  are  more  scarce  is 
partly  because  the  requisite  natural  faculties  are  more  rare,  and 
partly  because  the  expense  necessary  to  their  due  cultivation  is 
considerable. 

Classification  will,  I  presume,  be  more  or  less  perfect  in  propor 
tion  as  it  is  founded  upon  those  qualities  in  the  objects  of  it 
which,  with  reference  to  the  ends  of  the  science,  are  essential ;  but 
a  classification  based  upon  an  analysis  of  the  psychological  or  phys 
iological  operations  which  take  place  in  the  production  or  dis 
tribution  of  wealth  will  not  divide  producers  or  distributors  ac 
cording  to  their  economic  importance,  but  according  to  circum 
stances  which,  economically  considered,  are  purely  accidental. 


APPENDIX  C. 

THE  following  passage  from  Dr.  "Whewell's  "History  of  the  In 
ductive  Sciences  "  contains  so  elegant  an  example  of  the  logical 
process  by  which  the  great  generalizations  in  physical  science  are 
established,  that,  with  a  view  to  illustrate  some  occasional  refer 
ences  to  the  line  of  reasoning  pursued  in  physical  investigations 
which  occur  in  the  text,  I  am  induced  to  extract  it : 

"  When  we  look  at  the  history  of  the  emission-theory  of  light, 
we  see  exactly  wThat  we  may  consider  as  the  natural  course  of 
things  in  the  career  of  a  false  theory.  Such  a  theory  may,  to  a 
certain  extent,  explain  the  phenomena  which  it  wras  at  first  con 
trived  to  meet ;  but  every  new  class  of  facts  requires  a  new  sup 
position—an  addition  to  the  machinery;  and  as  observation  goes 
on,  these  incoherent  appendages  accumulate,  till  they  overwhelm 
and  upset  the  original  frame-work.  Such  was  the  history  of  the 
hypothesis  of  solid  epicycles ;  such  has  been  the  history  of  the 
hypothesis  of  the  material  emission  of  light.  In  its  simple  form, 
it  explained  reflection  and  refraction ;  but  the  colors  of  thin  plates 
added  to  it  the  hypothesis  of  fits  of  easy  transmission  and  reflec 
tion  ;  the  phenomena  of  diffraction  further  invested  the  particles 
with  complex  hypothetical  laws  of  attraction  and  repulsion ;  po 
larization  gave  them  sides;  double  refraction  subjected  them  to 
peculiar  forces  emanating  from  the  axes  of  crystals;  finally  dipo- 
larization  loaded  them  with  the  complex  and  .unconnected  con 
trivance  of  movable  polarization ;  and  even  when  all  this  had 
been  assumed,  additional  mechanism  was  wanting.  There  is  here 
no  unexpected  success,  no  happy  coincidence,  no  convergence  of 
principles  from  remote  quarters :  the  philosopher  builds  the  ma 
chine,  but  its  parts  do  not  fit ;  they  hold  together  on.ly  while  he 
presses  them  :  this  is  not  the  character  of  truth. 

"In  the  undulatory  theory,  on  the  other  hand,  all  tends  to  uni- 


APPENDIX  C.  235 

ty  and  simjjjicity.  YTe  explain  reflection  and  refraction  by  un 
dulations;  when  we  come  to  thin  plates,  the  requisite  'fits'  are 
alread}7  involved  in  our  fundamental  hypothesis,  for  they  are  the 
length  of  an  undulation :  the  phenomena  of  diffraction  also  re 
quire  such  intervals ;  and  the  intervals  thus  required  agree  exact 
ly  with  the  others  in  magnitude,  so  that  no  new  property  is  need 
ed.  Polarization  for  a  moment  checks  us ;  but  not  long ;  for  the 
direction  of  our  vibrations  is  hitherto  arbitrary — we  allow  polar 
ization  to  decide  it.  Having  done  this  for  the  sake  of  polariza 
tion,  we  find  that  it  also  answers  an  entirely  different  purpose — 
that  of  giving  the  law  of  double  refraction.  Truth  may  give  rise 
to  such  a  coincidence ;  falsehood  can  not.  But  the  phenomena 
became  more  numerous,  more  various,  more  strange ;  no  matter : 
the  theory  is  equal  to  them  all.  It  makes  not  a  single  new  physic 
al  hypothesis;  but  out  of  its  original  stock  of  principles  it  educes 
the  counterpart  of  all  that  observation  shows.  It  accounts  for, 
explains,  simplifies  the  most  entangled  cases;  corrects  known 
laws  and  facts;  predicts  and  discloses  unknown  ones;  becomes 
the  guide  of  its  former  teacher,  observation ;  and,  enlightened  by 
mechanical  conceptions,  acquires  an  insight  which  pierces  through 
shape  and  color  to  force  and  cause"  (vol.  ii.  pp.  464-G). 

Such  has  been  the  process  by  which  the  great  inductions  in 
physical  investigation  have  been  established.  In  economic  in 
quiry  (as  I  have  shown  in  my  third  lecture)  this  circuitous  meth 
od  is  unnecessary,  the  ultimate  facts  and  assumptions  being  sus 
ceptible  of  direct  proof. 


THE     E  N  D. 


14  DAY  USE 

RETURN  TO  DESK  FROM  WHICH  BORROWED 

LOAN  DEPT. 

This  book  is  due  on  the  last  date  stamped  below,  or 

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D 

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SEP  12  '66- 
UOAN 

AUG  2  3  2001 


LD  2J  A-50m-3.'62 
(C7097slO)476B 


General  Library 

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